Canada's Crypto Policy Faces Shift Under Carney's Leadership

Canada’s political landscape has shifted following the 2025 federal election, placing the country’s cryptocurrency policy at a critical juncture. With Pierre Poilievre’s defeat and Mark Carney retaining the Prime Minister position, the approach to digital assets is poised for significant changes. Poilievre, known for his pro-crypto stance, had advocated for legislation to make Canada a global blockchain hub. In contrast, Carney, with his background as the head of the Bank of Canada and the Bank of England, is known for a more cautious outlook on cryptocurrencies.

During the campaign, crypto took a backseat, with Poilievre barely mentioning the industry despite his previous pro-crypto efforts. The Conservatives’ strong performance, however, suggests that crypto is not facing imminent regulatory threats. According to regulatory lawyer and crypto expert Oliver Linch, the Carney administration is unlikely to introduce sweeping new crypto legislation but will instead focus on integrating crypto within existing financial regulatory frameworks, emphasizing compliance with anti-money laundering (AML) and know-your-customer (KYC) regulations.

Linch anticipates that the Carney government will prioritize systemic stability over unbridled innovation, favoring a more cautious approach to digital assets. This shift is expected to involve stricter regulations on private cryptocurrencies and a focus on consumer protection and financial system integrity. The government may also collaborate with global regulators to establish harmonized standards, potentially imposing stricter regulations on private cryptocurrencies.

Retail crypto investors in Canada may face increased scrutiny and more rigorous reporting requirements under the new regime. Access to certain crypto assets and products may be restricted, especially those deemed high-risk or lacking transparency. Exchanges operating in Canada might face stricter operational standards, impacting user experience. Additionally, tax authorities may enhance efforts to ensure proper reporting and taxation of crypto-related income.

The Carney government is expected to prioritize the development of a central bank digital currency (CBDC) to offer a secure digital payment option. Private stablecoins could face heightened regulatory requirements to ensure they meet standards for stability and transparency. Public consultations will likely follow, providing an opportunity to discuss the implications of pursuing a digital Canadian dollar.

Poilievre had floated the idea of reclassifying crypto assets from securities to commodities to reduce regulatory hurdles. Under the current administration, reclassification efforts may face significant hurdles. The classification of certain crypto assets as securities ensures they are subject to established investor protection laws, which is attractive to someone with Carney’s professional background. Any reconsideration of classifications would likely involve extensive analysis and stakeholder consultation and is unlikely to be a priority of the new government.

Despite political differences, there is a shared interest in ensuring financial system integrity and consumer protection. The challenge lies in balancing innovation with responsible oversight, transcending partisan lines. Crypto has increasingly become a topic of political debate in Canada, with differing views on its role in the economy. However, the new government will likely be interested in the opportunities crypto can bring for financial inclusion, despite it not being a decisive factor in elections.