Canada’s blockchain ecosystem agrees that collaboration is the key to realizing our multi-billion-dollar opportunity in the digital economy.
This week, the American cryptocurrency industry breathed a collective sigh of relief when the country’s Treasury Department announced that miners, stakers and wallet vendors would be exempt from the US Infrastructure Bill’s onerous tax reporting requirements on transactions.
Had this exemption not been granted, it would have obligated any company or individual involved in validating a high-value crypto transaction, or providing the wallets, to give the full identity details of counterparties to the IRS — information that, in almost every case, would be impossible for them to obtain. Unbelievably, the flawed bill initially even demanded broker licensing and tax reporting from crypto software developers.
Fixing what could have been a massive misstep took the tireless work of better-informed stakeholders in both the public and private sector.
One of the biggest threats to the US $1.84 trillion cryptocurrency market is a lack of understanding about the technologies and processes involved in the industry by regulators, leading to well-intended attempts at legal clarity that end up chilling investment, stalling innovation, and causing companies to migrate away from risky jurisdictions as they scale.
That’s why it’s so important that last week, Calgary Nose Hill Conservative MP Michelle Rempel Garner tabled Bill C-249, which requires the Minister of Finance to develop a framework for supporting the growth of cryptocurrency in Canada — and to build it with the full engagement and collaboration of the industry.
If enacted, provinces and territories would be responsible for designating industry members to act as consultants on policies that would inform the national cryptoasset framework, giving our entire blockchain ecosystem of companies, exchanges, miners, stakers and organizations a seat at the table when it comes to our national direction on cryptocurrency regulation and industry support.
Hut 8, one of Canada’s largest Bitcoin mining firms, was one of the first to issue a response to Bill C-249, citing that “a federal framework to regulate digital assets and consulting with industry leaders will help position Canada as a world leader in Blockchain innovation”.
At the Canadian Blockchain Consortium, we spend a significant amount of time and resources on government education through our roundtables, policy memos, classes and events, and our statement on the bill was equally optimistic — that uniting the public and private sector in building this framework will be a key differentiator and competitive advantage for our position in the new digital economy.
For the Canadian Blockchain Association for Women, the strong government engagement mandated through the bill will help make sure that the industry evolves in an inclusive way, where people from all backgrounds are given the chance to have a say in how our policies are shaped.
At GuildOne, where we’ve provided consultation and subject matter expertise to federal and provincial governments on diverse applications like energy innovation, cryptocurrency mining, NFTs, smart contract transactions, and the growing ways blockchain can support sustainability, Bill C-249 looks like a sign of recognition as to just how essential our industry will be in reimagining Canada’s future as a global technology leader.
It’s definitely captured the imagination of the media, both at home and abroad, with headlines like “Canada Set to Be Crypto Powerhouse With New Cryptocurrency Bill”, and “Canada gov’t urged to roll out welcome wagon for blockchain innovators”. For a relatively simple piece of pending legislation — that Canada needs a crypto framework, and that industry should be a part of its development — Bill C-249 has already had a big impact.
That’s because it’s hard to overstate how important this kind of signaling is to our disruptive corner of tech. After more than a decade of wild swings in public sentiment, confusion over crypto’s process and purpose, and especially, the past year of bans by oppressive governments like China and Turkey, making it clear that Canada is committed to fairly and knowledgably incorporating digital assets into its economic strategy will unlock new opportunities with widespread benefits.
We need a safe and supported crypto industry that will attract capital, companies and top talent in a competitive global environment.
We can see examples around us of how government engagement can create this — within just a few months of announcing that the state was open for crypto business in 2021, Texas brought in more than half a billion dollars in new investment from the sector, and drew dozens of major companies and projects to its innovation centers.
That is exactly what Canada needs, especially now. It’s not just about crypto, but the ecosystems of technology invention that form around it — including, most recently, the metaverse. As we continue our pivot from a resource economy to one based on knowledge and innovation, enthusiastic collaboration that bridges diverse stakeholders will be the only path to success.
In the March edition of the Canadian Blockchain Consortium Magazine, we’re going to be covering Bill C-249 and its potential impact in more detail — along with some of the other big moves by our government institutions, like Alberta’s new show of support for growing our crypto and Bitcoin mining sectors and concerns over crypto’s inclusion in the Emergency Act.
Check out our past editions below!