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Canada Takes Steps to Protect Financial Sector from Crypto ‘Challenges’

In Canada, the government is beginning consultations with crypto industry stakeholders to address the digitization of money, which it sees challenging democratic institutions around the world.

The North American nation, which includes 10 provinces and three territories, said in its 2022 report budget announcement that digital assets continue to play a pivotal role in circumventing sanctions while simultaneously facilitating illegal activity.

The well-worn narrative has been picked up in the past by several major governments around the world, including China, the United States and India.

In step with the times, Canada has said it is seeking to establish a financial sector legislative review to examine the digitalization of money, with the aim of enhancing the stability and security of the financial sector.

The government will meet with those involved in cryptocurrencies, stablecoins and central bank digital currencies (CBDCs) starting this week.

Earlier this year, Prime Minister Justin Trudeau called off bitcoin-fueled protests from Canadian truckersdubbed the Freedom Convoy 2021, which opposed government-imposed COVID-19 mandates.

The truckers managed to raise at least $1 million through the bitcoin fundraising platform Tally, bypassing currency controls after being banned from other platforms, including GoFundMe, at the behest of Canadian officials.

More recently, Trudeau took aim at Opposition Leader-elect Pierre Poilievre in September, where he called his rival’s views and aspirations for the “volatile” asset class a irresponsible management.

Quebec and Canada to suspend hydropower to crypto miners

Samson Mow, former chief strategy officer at Bitcoin infrastructure provider Blockstream, told Blockworks he was disappointed with Canada’s stance.

“The digitization of money is not the issue here. Money has been digital for a very long time. The problem is that with the advent of Bitcoin, money is now digital but out of their control,” said the Canadian-Chinese national.

Mow, who now runs bitcoin tech company JAN3 and runs game studio Pixelmatic, said Canada has always been tough on crypto, namely bitcoin, in the past.

He said those hostilities included refusing to bank bitcoin companies and refusing to allocate electricity to mining companies despite Canada having abundant excess energy.

Indeed, a major utility provider in Canada’s largest province, Quebec, asked the region’s energy regulator to suspend allocation from hydroelectricity to bitcoin miners.

“About 270 MW had to be dedicated to cryptographic use [crypto mining] in the short term, but dedicating this amount of capacity to this use would increase pressure on current balances,” Hydro-Québec, a publicly regulated company, said in a statement released Wednesday.

The country’s stance against miners — those who provide security and stability to proof-of-work blockchains, primarily Bitcoin — has been somewhat hostile in recent years, forcing many of the biggest players in the industry to look for clean energy elsewhere.

“Until governments recognize that money should be money and not a surveillance tool or something they need to ‘manage’, their citizens are in for a rough ride,” Mow said.

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  • Sebastien Sinclair


    Senior Reporter, Asia News Desk

    Sebastian Sinclair is a senior reporter for Blockworks operating in Southeast Asia. He has experience covering the crypto market as well as some developments affecting the industry including regulation, business, and mergers and acquisitions. It currently does not hold any cryptocurrency. Contact Sébastien by e-mail at [email protected]

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