As the U.S. surges ahead with pro-crypto policies under Trump’s second term, Canada is losing its edge in the digital currency space. Once a crypto pioneer, the nation now risks being left behind by regulatory caution and missed innovation.
A Rising Tide in U.S. Crypto Policy Leaves Canada in the Shadows
When Changpeng Zhao, the Canadian founder of Binance—the world’s largest cryptocurrency exchange—accepted a four-month U.S. prison sentence on a money-laundering charge, he couldn’t have known the tide would turn so dramatically, and so soon.
Just one day after the inauguration of President Donald Trump, Ross Ulbricht—founder of the Silk Road darknet marketplace and long-time crypto martyr—was pardoned. His release was a signal of the Trump administration’s new posture toward digital assets. Mr. Zhao, not wasting a moment, has since applied for a pardon himself.
As Washington races to embrace cryptocurrency with a flurry of legislative action—including hearings on three major crypto bills and the prominent Genius Act—Canada’s role in the global crypto scene is fading. Once the birthplace of Ethereum and home to the world’s first Bitcoin ATM, Canada now finds itself largely sidelined.
The Trump Effect: Pardons, Policies, and a Surging Market
During his first presidency, Mr. Trump famously declared, “I am not a fan of bitcoin and other cryptocurrencies, which are not money and whose value is highly volatile and based on thin air.” But that sentiment has changed. Today, cryptocurrency has become a rallying point on the political right, gaining prominence alongside other polarizing symbols of America’s culture wars.
In 2024, Mr. Trump campaigned at a major Bitcoin conference. The industry responded with generous donations. Since then, enforcement against crypto giants like Coinbase, Kraken, and Binance has softened. The Securities and Exchange Commission moved to settle long-standing cases, and the Justice Department has shifted its focus to crimes like fraud and terrorism, rather than regulatory missteps.
This friendlier regulatory environment has supercharged the market. Bitcoin’s value has rocketed past US$120,000—an all-time high—despite historical patterns that suggested a downturn was due. The Genius Act, which introduces a stablecoin regulatory framework, further bolsters this momentum by offering clarity and legitimacy to the industry.
“If crypto is going to define the future, I want it to be mined, minted and made in the USA,” Mr. Trump declared last year.
Canada’s Regulatory Rigidity Dims Crypto’s Potential
In sharp contrast, Canada’s crypto climate has turned frosty. Once a leader in blockchain innovation, the country now hosts only the branch offices of global firms. Many have left entirely, citing tough regulations and a stagnant market.
“2024 was a lacklustre year for Canadian crypto,” noted lawyers at McCarthy Tétrault. “Regulators imposed additional product restrictions, raised barriers to entry and did not approve any new crypto products.” The assessment is clear: while the U.S. accelerates, Canada stalls.
Canada’s caution mirrors its broader financial ethos. With high reserve requirements and stringent entry barriers, the country’s banking system has been lauded for its stability. But that comes at a cost: less innovation, fewer competitors, and higher consumer fees. Since 2001, the U.S. has witnessed over 570 bank failures. Canada? Just a handful. Safety, it seems, means staying still.
A Crossroads of Innovation and Restraint
The divergence between U.S. and Canadian crypto policies marks a critical moment. With figures like Sam Bankman-Fried, Virgil Griffith, and Roger Ver now lining up for pardons and crypto-friendly legislation gaining traction, the U.S. is making its stance clear. Canada’s future in the digital currency landscape, however, hangs in the balance.
History suggests it’s difficult to have both growth and stability. “Do you want to be the roaring, buck-wild boomtown? Or do you want to be the peaceful land with a quiet people?” The U.S. has made its choice. Canada appears to have made one too.
