Cryptocurrencies have increasingly become a point of contention between the Liberal and Conservative parties of Canada. In 2022, the Conservatives championed the use of cryptocurrencies as a potential buffer against inflation, attributing the surge in inflation to a 30-year high and the skyrocketing housing costs to the Liberal’s economic policies.
In contrast, the Liberals have vocally critiqued cryptocurrencies for their inherent volatility. Cryptocurrencies are typically classified as securities in Canada, which poses a significant challenge for those looking to establish crypto-focused businesses. The Conservatives view this stringent regulatory approach as a detriment to Canada’s economic and technological growth.
Former Finance Minister Chrystia Freeland publicly lambasted Conservative Party Leader Pierre Poilievre for his promotion of cryptocurrencies after the bullish market of 2021 transitioned into a bearish phase. Poilievre has been a long-time advocate for the use of cryptocurrencies alongside traditional currencies, viewing them as a hedge against periods of high inflation. He has also championed the reclassification of cryptocurrencies from securities to commodities, envisioning a decentralized economy powered by cryptocurrencies.
In 2022, Calgary Nose Hill MP Michelle Rempel Garner introduced the Canadian cryptocurrency initiative, aiming to make Canada the “blockchain capital of the world.” Garner’s initiative, Bill C-249, sought to foster dialogue between the Minister of Finance and cryptocurrency developers and entrepreneurs to establish a legal framework for regulating cryptocurrencies. Despite being lauded by crypto innovators and the Conservative Party, the bill was defeated in its second reading in the House of Commons.
Interestingly, comments made by U.S. President Donald Trump about making Canada the 51st state of America served to bolster support for the Liberal Party among older voters. Prime Minister Mark Carney was viewed as the best candidate to safeguard Canada’s interests in negotiations with the U.S. Conversely, the Conservatives focused on domestic issues like inflation and the escalating housing costs.
Ultimately, the election saw an unexpected shift in the political landscape, with younger voters gravitating towards the Conservative Party, while older voters, whose primary concern was “dealing with Donald Trump,” formed a significant voting bloc that ensured Carney’s victory.
Despite the Conservatives’ promotion of stablecoins as a tool to protect Canadians from inflation, the Liberal Party’s approach seems geared towards gaining more independence from the U.S. Their favourable stance towards central bank digital currencies (CBDCs) aligns more with the European model, while the Trump administration halted work on CBDCs over privacy concerns.
Under Carney’s leadership, the Liberal Party’s skepticism towards cryptocurrencies is unlikely to change. High-profile party members, including Trudeau and Carney, have frequently expressed their doubts about cryptocurrencies, citing issues such as Bitcoin’s low network capacity and the price volatility of cryptocurrencies. As former heads of the Bank of Canada and the Bank of England, Carney places his faith in centralized financial institutions and views CBDCs as superior to stablecoins due to their greater regulatory control.
Moving forward, crypto advocates are likely to face considerable challenges in Canada over the next four years. Despite the burgeoning global interest in cryptocurrencies, the Canadian political landscape appears to be leaning towards a more cautious and regulated approach.
