Four years ago, in my first-ever article for The Hub, I called on Canada to seize on the growing cryptocurrency opportunity—even though at the time Bitcoin was worth just $30,000 USD. In particular, I highlighted the impending adoption of Bitcoin as an accepted currency by El Salvador and argued that Canada should aim for a first-mover advantage among developed countries. As I wrote:
…the first country to acquire 1 percent of the total supply of Bitcoin will likely be the only country ever able to do so. As with discovering the world’s rarest mineral deposit in your soil, Bitcoin has the power to make poor countries rich and rich countries irrelevant.
It was a controversial idea at the time. El Salvador for instance was ridiculed by some elite voices in the international community, including strict warnings issued by the International Monetary Fund. In hindsight, El Salvador now seems prescient.
Last week, as part of his first actions since his inauguration, President Trump signed an executive order entitled “Executive Order to Establish United States Leadership in Digital Financial Technology.”
Noteworthy in this EO was this line: “evaluating the creation of a strategic national digital assets stockpile.” Put differently, Trump is preparing to launch a Bitcoin reserve within the United States Treasury.
This comes as no surprise to people from the Bitcoin and cryptocurrency industry, as Trump committed to this idea when speaking at the Bitcoin Conference in July 2024 while campaigning for the presidency.
This tone from the White House stands in stark contrast to the past four years when President Biden was widely seen as an opponent of the burgeoning Bitcoin industry. Gary Gensler (Biden’s former Chair of the SEC), Senator Elizabeth Warren, and the IRS were at the forefront of that perceived “war on crypto.”
With such a major shift from the U.S. federal government, it’s no surprise that Bitcoin hit its newest all-time high at $108,000 USD in December during the excitement and lead-up to Trump’s inauguration.
In Canada, Bitcoin entrepreneurs and enthusiasts have also directly benefited from this shift. As of 2022, the Bank of Canada reported that more than 10 percent of Canadians owned Bitcoin, a number that has undoubtedly trended up in the intervening two years since that study was completed. Some sources show numbers as high as 40 percent of Canadians owning some form of cryptocurrency. Naturally, it’s impossible to be precise in these types of studies, but one way or another there are millions of Canadians watching this market, and now more recently watching the shift in American policy on this topic.
While we may be playing catch-up at this point, there is still opportunity here for Canada and Canadian policymakers.
My original proposals are still worth pursuing. The first is for the federal government (if only we had one at the moment!) to enact a small set of tax policy changes that would permit and encourage the accumulation of Bitcoin within tax-protected structures (like the TFSA).
Second, the federal government should direct the Bank of Canada to slowly start including Bitcoin in its “International Reserves,” which currently hold approximately $66 billion in American dollars and approximately $26 billion USD in “other foreign currencies.”
Considering the size of the recent federal budget—currently projected at $449 billion CAD—it would not have been a big ticket item to include an annual expenditure of $500 million to $1 billion CAD per year to purchase Bitcoin. Or separately, the Bank of Canada could have diversified other reserve assets into Bitcoin at no cost to the federal budget.
There’s no more time to waste, though.
Current speculation in the U.S. is that Trump’s team is working on a timeline of approximately six months to make recommendations on how the U.S. Treasury will approach the creation of this Strategic National Digital Assets Stockpile. That does not leave much room for Canada to act first.
Once the U.S. government starts to move on this commitment, other major global economies will undoubtedly have no choice but to follow suit, and the so-called “Bitcoin gold rush” will have begun. Bitcoin will very likely see explosive growth in value and much of the opportunity to benefit from its ascent will be lost.
Naturally, considering the timid nature of Canadian policy and the current disarray in our federal politics, I have no confidence that Canada will do something on this topic until we’re the last to the party. But I’ll continue to advocate for it and be cautiously optimistic.
Notably, Conservative leader Pierre Poilievre has made no secret of his interest and understanding of Bitcoin, and others around him, including shadow cabinet minister Adam Chambers, have been publicly supportive of Bitcoin and the cryptocurrency industry.
But regardless of what happens in Ottawa, there is a tectonic global shift currently underway and Canadians should be weary of being left behind. Four years ago would have been an ideal time to act. We shouldn’t miss out again now.
Matthew Spoke is a Toronto real estate entrepreneur. As such, Matt spends a lot of time focused on housing policy, advocating at the municipal, provincial, and federal levels of government for common-sense supply-side policies to end the housing crisis. Prior to this, he spent 10 years as a tech entrepreneur…...
