Karsten Wenzlaff, Advisor
August 26th, 2025
Karsten Wenzlaff is a Crowdfunding and Fintech Expert from Germany. He is Secretary-General of Digit[...]
Category Archives: Blockchain, Crypto, Digital Assets, Tokens, CBDCs, Stablecoins, Metaverse, NFTs
BlackRock Expands IBIT Bitcoin ETF Offering in Canada
Crypto | Jan 15, 2025
Image: Freepik/pvproductions
BlackRock LaunchesiShares Bitcoin ETF (IBIT) in Canada on the Cboe Exchange
BlackRock, the world's largest money manager, certainly understands the phrase 'strike while the irons hot'. With $11.6 trillion in assets under management (AUM), influence and credibility, they are dominating a wide range of investment products especially its iShares ETF brand.
Last year, along with various other players, BlackRock launched it's leading spot bitcoin iShares ETF in the U.S. which has attracted USD $50 billion since launching in January 2024. Building off that success, BlackRock is now launching its popular Bitcoin exchange-traded fund in Canada on the Cboe Canada exchange, giving Canadian investors another regulated option to gain exposure to the world's most prominent cryptocurrency without having to deal with the complexities of managing digital wallets and security concerns.
See: BlackRock Launches New Fund on Ethereum, Bullish on Tokenization
The Canadian version of the iShares Bitcoin ETF will trade under the ticker symbol IBIT in Canadian dollars, on the Cboe Canada exchange (Note: IBIT.U is in USD) and mirrors the performance of Bitcoin with a 0.32% annual management fee. Bitcoin's asset type is classified as a 'commodity' on BlackRock's IBIT page, with the fund currently holding CAD $23.8 million in net asset value.
Robert Mitchnick, Head of Digital Assets at BlackRock said in an interview with Bloomberg:
“It’s about bringing access… to Canadian investors. Canada is a market where we feel like there is a significant opportunity. We’ve seen this resonate with all manner of investor types. It has the potential to be a unique diversifier.”
Investors Should Consider
Bitcoin has been one of the best performing asset classes in recent years and many crypto investment experts believe Bitcoin is expected to appreciate further in 2025 with potentially favourably regulatory policies under a new crypto-friendly U.S. administration under Trump, further increasing institutional adoption.
Canada has long been recognized as a leader in cryptocurrency investment innovation and was the first country to approve Bitcoin ETFs globally, setting the stage for wider adoption among individuals and professional investors.
See: How Fintechs Are Unlocking Value in Private Markets 2024
Although investing in crypto ETFs like IBIT make it super easy to back Bitcoin, prospective investors should understand that investing in cryptocurrencies is very high risk with significant price volatility.
Why It Matters
More regulated ETFs approved equals more adoption and acceptance of cryptocurrency as a mainstream asset class and investment option.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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Fidelity Report Insights on Digital Assets in 2025
Digital Assets | Jan 8, 2025
Image: Fidelity Digital Assets Look Ahead 2025 (Fidelity report)
Fidelity's Digital Assets 2025 Report Shows Innovation and Global Adoption
Since launching in 2018, Fidelity Digital Assets (FDA) provides secure custody, asset management, 24/7 trading, and crypto market analysis and develops blockchain solutions to bridge traditional finance with decentralized systems and helps institutional clients adopt digital assets confidently. FDA recently published 'Fidelity Digital Assets 2025 Looking Ahead' (34 page PDF report) offering some key data points and trends at the forefront of digital asset markets. This article provides an overview of the report to keep you informed.
Spot Bitcoin ETPs Continue to Grow
Investors seem to love Spot Bitcoin exchange-traded products -> view Bitcoin ETF Volume Tracker. By the end of 2024 they held over 1 million Bitcoin, which is equivalent to 5% of the total supply and assets under management of $114 billion. Comparatively, this growth far outpaces the adoption of early gold ETFs. 80% of the investments come from retail but institutional participation is rising due for advanced investment strategies to manage exposure and hedge risk.
Stablecoins Transactions Rival Visa Volume
Stablecoins processed (trading, remittances, cross border payments) $12 trillion in transfers in 2024 which is darn close to competitor Visa’s $13.2 trillion annual transaction volume. Daily trading volumes broke a record of $120 billion in November 2024.
See: National Bank Doubling Down on MicroStrategy’s Bitcoin Boom
Layer 2 solutions have drastically improved scalability by reducing fees by over 90% making stablecoins suitable for everyday transactions. Regulatory clarity in the EU and other regions will likely fuel further adoption.
Ethereum’s Scaling Upgrades Pays Off
Ethereum’s network upgrades are making transactions faster and cheaper. Rollups and Layer 2 solutions like Optimism and Arbitrum have cut fees by over 90%. The upcoming Prague/Electra upgrade will make Ethereum even quicker and more efficient by improving how it handles data. This is all to say that Ethereum is still a top choice for decentralized finance and digital assets.
Bitcoin Miners Adapt
Declining transaction fees on Bitcoin’s network is pushing miners to innovate. Protocols like DATUM are decentralizing mining which gives participants more control. Further, countries with low cost energy are emerging dominant players in the Bitcoin mining sector due to cost/margins.
Tokenization Expands
The tokenization of real world assets (RWAs) like real estate, bonds or even car titles into digital formats grew to $14 billion in 2024 ($8 billion in 2023) with projections reaching $30 billion by 2025. For example, California’s DMV is digitizing 42 million car titles using Avalanche to reduce costs, increase transparency, and democratize access to assets.
Governments Turn to Bitcoin
Governments are also increasing their Bitcoin reserves. The United States holds 198,000 Bitcoin ($20 billion), followed by China with 190,000 Bitcoin. Smaller countries like Bhutan and El Salvador are leveraging Bitcoin for economic security.
See: Investing in the Future of AI and Blockchain
While many of these bitcoin/crypto reserves are actually seized assets from various fraud cases, any active Bitcoin accumulation by governments is viewed by the market as a positive signal of the growing acceptance of Bitcoin as a financial reserve.
DeFi Lending Grows
Decentralized finance loans reached $55 billion in total value locked in 2024, up more than double from $22 billion in 2023. Also, Bitcoin’s integration into DeFi is creating new opportunities for collateralized loans. More and more traditional financial institutions are looking at these markets due to higher yields and the fact that President-elect Donald Trump's administration is pro-crypto and will provide much needed regulatory clarity.
Conclusion
The Fidelity Digital Assets 2025 Look Ahead Report provides a simple overview of some key trends that are moving crypto from a niche and volatile investment towards a mainstream financial investment and tool. The world has finally reached its tipping point of embracing these new technologies and is at work to redefine the global financial system of digital modern times.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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OSC Crypto Trading Platform Compliance Review Findings
Regulation | Dec 20, 2024
Image: Freepik/upklyak
Are Restricted Dealer Crypto Platforms Doing Enough to Protect Investors? The OSC Weights In
The Ontario Securities Commission (OSC) recently conducted a compliance review of 6 restricted dealers operating crypto asset trading platforms (CTPs) in Ontario, and published a summary of their findings, "Staff Notice 33-757" (see press release). The results? A mix of compliance successes and serious gaps, especially in investor protection practices. Here’s what the OSC found, why it matters, and key takeaways.
Focus of the Review and Findings
This was about the fundamentals: are platforms doing enough to ensure that the people using them actually understand the risks involved? Are they setting limits to protect clients from losing more than they can afford? Specifically, there were 3 areas of concern being investigated:
1. "Account Appropriateness Assessments"
Are platforms making sure accounts are appropriate for their users,based on their individual financial situations and crypto knowledge? CTPs are required to evaluate clients based on their experience with crypto assets, financial circumstances, and risk tolerance.
See: OSC Urges Stricter Rules on Gamified Investing Features
The OSC found that some platforms are using inadequate processes, such as relying only on self-reported user information without sufficient verification. Many platforms use a bare-bones approach to assess whether accounts are appropriate for their clients. They rely too heavily on online forms and didn’t follow up on inconsistencies or update/maintain client information over time. This means people are being approved to trade without a clear understanding of whether the crypto investment is the right fit for them.
2. "Investment Limits"
Are clients being prevented from investing more than they should in a high risk investment or asset? The OSC sets investment limits on certain crypto assets to protect investors (especially retail investors).
The OSC found that most crypto trading platforms implemented the 'investment limits' but lacked an effective monitoring system. CTPs need a good mechanism to enforce the limits and also prevent clients from exceeding them, which is a problem because of crypto's volatility.
3. "Client Limits"
Are there suitable safeguards in place to stop users from losing too much money? Client limits refer to the maximum value of crypto assets a client can hold on a platform.
See: Regulatory Updates for Crypto Asset Trading Platforms
The OSC observed that some platforms do not have clear policies or systems in place to monitor client holdings (and compare them against the limits). This appears to be the biggest issue in the compliance review since CTPs are supposed to restrict people from losing more than they can afford. Too often platforms either ignore the limits or don't act quickly enough if client limits are breached. Clients aren't being warned in time and in some cases no action is taken at all.
Takeaways for Your Business
These findings should be a wake-up call if you operate a fintech or crypto business. The OSC is sending the industry and specifically CTPs a message to review their policies and internal systems to ensure they comply and tighten the ship. Here are some takeaways.
- Think of on-boarding as your chance to really understand your clients. what their financial situation is, their knowledge of crypto, and how much risk they can handle. Make sure you check in with them regularly and all information is verified and documented. Not just once a year but whenever things change for them or in the market.
- Limits are there for a reason. It's how much a client can invest or how much they can lose, so baking these guardrails into your system is critical. Have systems in place to monitor and track these limits in real time. Don't wait until it's too late - automate the alert process.
See: UK vs. Canada: A Tale of Two Different Crypto Consumers
- Communication is key. When clients are getting close to their limits, let them know. But do it in a way that’s clear and educational. This isn't financial advice. You're giving them the tools to make better decisions.
- Stay up to date with all regulatory updates and changes that may impact your business, and to remain compliant.
Final Thought
Consider this your advanced warning. Are your processes strong enough? Are your systems up to date? Are you putting your clients first? The OSC’s findings are an opportunity to plug gaps, strengthen your approach, and turn compliance into a competitive advantage.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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Gensler’s Final Salvo as SEC Targets Unicoin in Crypto Clash
Enforcement | Dec 17, 2024
Image: Freepik/pikisuperstar
Unicoin Receives SEC Wells Notice During Gensler's Final Weeks at the SEC
As reported by Fortune, crypto tokenization and real-world-assets (RWA) juggernaut, Unicoin, received a Wells Notice from the SEC as they prepare for a major transition with new leadership direction. Yes, still turbulence in the industry with Gensler stepping down on January 20 and new SEC Chair, Paul Atkins, set to take over the helm. Unicoin CEO Alex Konanykhin indicated they will fight back against allegations of fraud and unregistered securities.
Unicoin’s Inability to Register Token as Security
Launched in 2015, Unicoin is a cryptocurrency that is backed by real-world assets like real estate, which gives the token a tangible value instead of the market relying solely on speculation. This helps reduce price volatility and attracts investors looking for more secure opportunities.
The company also marketed itself as the official cryptocurrency of a TV show called Unicorn Hunters where startups pitch to celebrity judges, which helped it gain a lot of visibility and approx 70,000 investors via $3.5 billion in token sales. Their popularity also attracted the SEC's attention. The Wells Notice accused Unicoin of both securities violations and also fraud which hasn't been included in recent SEC-driven crypto lawsuits.
See: Insights from the Tokenization Report Act of 2024 Hearing
Unicoin's CEO Konanykhin told Fortune that while the company has faced several SEC investigations this is the first time it has received a Wells Notice. Earlier this year, Unicoin agreed with the SEC to hold off on launching a public offering but chose to move forward with the company’s plans and launched its primary offering on a U.S. regulated trading platform INX.One after Trump's election victory and that Unicorn had publicly reported to the SEC for the past five years including recent paperwork signalling its intent to go public via a reverse merger.
With the pro-crypto advocate, Paul Atkins imminently replacing Gensler, Unicoin was banking that the regulatory environment would be more collaborative. At the end of the day, the firms inability to register their token as a security has left if vulnerable.
What This Means for Industry
Regulation won't change overnight and enforcement actions launched under Gensler will still be ongoing. Crypto companies should expect a more gradual shift to the SEC's regulatory approach and need to weather the storm during the transition.
See: 18 States Sue SEC for Regulatory Overreach on Crypto
Unicoin's Wells Notice also included allegations of fraud which raise the stakes. Companies should review and tighten their compliance efforts further. Linking crypto to real-world asset models indicate how tricky it is to align financial innovations within existing securities laws.
In Closing
As the SEC's leadership is in a transitional phrase, uncertainty still remains.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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National Bank Doubling Down on MicroStrategy’s Bitcoin Boom
Investing | Dec 16, 2024
Image: Freepik
National Bank of Canada FI Purchases More MicroStrategy Shares
National Bank of Canada FI (investment arm of the bank) has purchased an additional 18,879 shares of MicroStrategy (NASDAQ: MSTR), signalling further institutional interest in bitcoin and digital assets. MicroStrategy is the unprecedented leader of corporate Bitcoin adoption, holding 152,800 Bitcoin worth over $5.1 billion, the largest publicly traded corporate holder of bitcoin.
*Update: MicroStrategy purchased even MORE bitcoin, acquiring an additional 15350 BTC coins for a sum of $1.5 billion. Now MSTR owns approx 440,000 bitcoins, as of Dec 16.
The software firm-turned-bitcoin whale said in a filing Monday morning that it had acquired an additional 15,350 bitcoins for $1.5 billion. The company now owns roughly 440,000 bitcoins.
See: Vancouver’s Bitcoin Vision: A New Era for City Finances
According to a past 13F-HR form filing, the National Bank of Canada increased its investment stake in MicroStrategy by 8.8% in the first quarter of 2024. Then by March 31, the bank's holdings increased to 1,678 shares, worth $516,822. With it's latest purchase of an additional 18,879 shares of MicroStrategy, the bank now holds a total of 20,647 shares valued at approx $3.48 million.
Why It Matters
MicroStrategy’s stock has skyrocketed 570% this year, receiving a strong boost in confidence by its recent inclusion in the Nasdaq-100 index and the growing value of its Bitcoin holdings. The divide between traditional banking and digital finance continues to narrow while highlighting the growing importance of blockchain technology and its role in the future of finance across the globe including Canada.
Closing Thought
While MicroStrategy is not currently a Bitcoin bank, given its massive Bitcoin holdings, focus on blockchain, and strong technology platform it could evolve into providing services that mimic traditional banking functions using Bitcoin.
See: Bitcoin’s Evolving: The Rise of DeFi on Bitcoin
For now it's a pioneer, influencing enterprises on how they think about and integrate digital assets into their operations and holdings.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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ASIC Consultation on New Digital Asset Rules
Regulation | Dec 12, 2024
Image: Freepik/WangXiNa
The Australian Securities and Investments Commission Seeks Input on New Digital Assets Rules
The Australian Securities and Investments Commission (ASIC) is working to clarify rules for businesses and individuals working with digital assets. They've published Consultation Paper 381 (CP 381) outlining updates to Information Sheet 225 (INFO 225), which provides more specific guidance on how existing financial laws apply to assets like stablecoins, staking services, and tokenized products. Australia's securities regulator is now seeking feedback on these updates.
What Updates Are in Scope?
ASIC’s proposed updates focus on ensuring digital asset businesses understand their obligations under current financial laws. The updates include
See: Canada Pauses CBDC Plans, Australia Advances Wholesale Focus
- ASIC offers 13 practical examples (see below) to show how different digital asset types and services might be classified as financial products.
- Businesses dealing with digital assets classified as financial products must follow the same rules as traditional financial services including obtaining an Australian Financial Services (AFS) Licence.
- ASIC proposes a grace period for businesses actively working towards compliance to protect them from enforcement actions during the licensing process.
- These updates aim to protect customers while supporting market integrity and innovation.
13 Practical Examples
In the consultation document, ASIC provides 13 practical examples to help businesses understand their legal registration and compliance obligations:
1. Stablecoins as Financial Products - Stablecoins tied to an asset (i.e., fiat currency or government bonds) could be seen as financial products depending on their purpose and how they are promoted. For example, if a stablecoin is backed by government bonds and offers financial benefits, it may need licensing as a managed investment scheme.
2. Staking Services - Businesses that let customers stake tokens to earn rewards may fall under financial product rules (esp if they add features like pooling tokens). For example, a staking service combining tokens from multiple users to meet blockchain requirements could require an Australian Financial Services (AFS) licence.
See: Vancouver’s Bitcoin Vision: A New Era for City Finances
3. Tokenized Assets - Tokens representing physical or financial items (i.e., gold or real estate) could be classified as securities if they involve shared profits or pooled funds. For example, a gold-backed token sold on an exchange may need to comply with securities or investment regulations.
4. Wrapped Tokens - Tokens that represent other assets might be financial products if they suggest investment or profit potential. For example, a token offering a stake in a project or company may require registration licensing as a security.
5. Token Sales and Fundraising - Raising funds through token sales, such as Initial Coin Offerings (ICOs), could be regulated as securities if linked to the issuer’s success. For example, selling tokens to finance a blockchain venture may require a prospectus to comply with securities laws.
6. NFTs and Collectibles - Non-fungible tokens (NFTs) are generally not financial products unless marketed with potential financial returns. For example, an NFT that promises a share in future profits from sales may fall under investment rules.
7. DeFi Platforms and Services - Decentralized Finance (DeFi) platforms could require licences if they manage pooled funds or offer lending and borrowing services. For example, a DeFi protocol pooling user funds to generate returns might be classified as a managed investment scheme.
See: Two Artists Sue SEC for NFT legal Showdown
8. Digital Asset Wallet Providers - Wallets offering extra services like earning interest or staking options may need to comply with financial product laws. For example, a wallet letting users pool assets to earn interest would likely require a licence.
9. Payment Services Using Digital Assets - Platforms facilitating payments with digital assets may need licensing as non-cash payment facilities. For example, a business allowing customers to use tokens for everyday purchases might need authorization to operate.
10. Buy-Back Arrangements - When businesses promise to buy back tokens based on value or performance, they may be treated as financial investments. For example, a token issuer guaranteeing buy-backs at a higher price could need an AFS licence.
11. Rewards and Loyalty Programs - Rewards programs using digital tokens may be financial products if the tokens are tradeable and linked to business success. For example, a loyalty token offering value tied to a company’s performance might require regulation.
12. Bundled Services and Products - Digital assets combined with other services may be regulated as a single financial product. For example, a package including tokens with staking and governance features may require licensing for the entire service.
13. Secondary Market Trades - Tokens traded on secondary markets could be regulated if their value depends on the issuer’s performance. For example, a token that increases in value as the issuing company succeeds might fall under securities laws.
See: WonderFi Announces Australian Market Entry
The thirteen scenarios above help businesses assess whether their digital asset offerings comply with existing financial regulations, and clarifies when licensing, disclosure, and compliance obligations apply. Companies are encouraged to assess their service offerings using the practical examples and seek feedback from the ASIC if unsure.
What Does ASIC Want Feedback On?
ASIC is seeking input from digital asset businesses, financial service providers, and other stakeholders on the following:
- Are the examples and explanations in the updated guidelines clear and easy to understand? Do they help businesses navigate the rules for digital assets?
- Is the current process for obtaining licences practical for digital asset businesses? Are there specific issues for products like stablecoins or wrapped tokens?
- ASIC is considering a "no-action" policy that would let businesses applying for licences operate without penalties during the review period. What are your thoughts on this 'temporary relief' idea?
See: PayPal’s Legal Win Helps Shape Future of Digital Wallets
- How can ASIC’s guidelines help businesses transition smoothly to the Government’s proposed regulations for digital asset platforms and payment stablecoins?
- What challenges do businesses face when trying to meet these regulations? Are there practical problems ASIC should address in its guidance?
Your Input Matters
If you’re in the digital asset space or have a stake in how these regulations evolve, now’s the time to speak up. By sharing your feedback, you can help ASIC create rules that support innovation while protecting consumers and keeping markets fair.
The deadline to send your comments to ASICs Digital Asset Team on the proposed updates is February 28, 2025. ASIC plans to release the final guidelines in mid-2025. Email: digital.assets@asic.gov.au
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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Vancouver’s Bitcoin Vision: A New Era for City Finances
Crypto | Dec 10, 2024
Image: Freepik/TravelScape
Is Bitcoin Becoming the Reserve Asset of the Future?
Is Vancouver about to lead the Bitcoin revolution in Canada? The Mayor of Vancouver Ken Sim (elected on October 15, 2022) announced that the city should use Bitcoin as part of the city's financial reserves in a proposal titled, “Preserving the City’s Purchasing Power Through Diversification of Financial Resources”. Sim's idea comes at a time when the Canadian dollar is losing value because of inflation and other economic pressures. He wants to protect the city's money from inflation and economic uncertainty by making Vancouver a Bitcoin-friendly city while also positioning it as a hub for financial innovation. The city council plans to discuss on December 11, 2024.
What’s the Plan?
The proposal goes beyond just holding Bitcoin in the city’s reserves, and outlines a comprehensive plan to make Vancouver a “Bitcoin-friendly city”:
- Residents could get the option to pay taxes and city fees using Bitcoin.
- Embracing Bitcoin could bring new businesses to the city and create jobs in crypto and blockchain.
- The city will engage the public by talking to experts, local businesses, and residents to ensure any decisions are informed and transparent.
Why is Vancouver Talking About Bitcoin?
Bitcoin is often referred to as a store of wealth or 'digital gold' (among other things). Unlike traditional money, Bitcoin has a fixed supply and operates on a decentralized network, so no one can print more of it. Bitcoin has been the top performing financial asset over the past decade with an average annual return of 230%, surpassing all other asset classes by a significant margin. Massive investment companies like BlackRock, Fidelity, and Deutsche Bank are already invested in Bitcoin and see bitcoin as a long term store of value. The proposal argues that Vancouver should join cities and countries around the world that are exploring Bitcoin to stay ahead of the curve.
See: Bitcoin Hits $100K, Pizzas Now Worth $1 Billion!
Ken Sim, Mayor of Vancouver:
“We need to think about the future. [Bitcoin is] the greatest invention in human history.”
From city halls in Canada and the powers that be in the United States and beyond, leaders are debating if Bitcoin could play an important role in hedging economies against uncertainty. Globally, countries are looking at how Bitcoin might fit into their financial strategies. To name just a few:
- Some United States policymakers including President-elect Donald Trump and Senator Cynthia Lummis are pushing for a national Bitcoin reserve. Lummis’ proposal would convert some government gold reserves into Bitcoin and acquire up to one million Bitcoins over five years. While Elon Musk sounds the alarm about America's unsustainable $35 trillion debt, advocates of a national bitcoin reserve argue the move could help reduce the national debt, strengthen the dollar, and counter economic threats from competing nations like China and Russia.
- El Salvador was the first country to adopt Bitcoin as legal tender. They built a national Bitcoin reserve of over 5,900 coins which is now valued at more than $600 million, and see Bitcoin as a tool to boost financial inclusion and reduce reliance on traditional currencies. Yet the IMF wants El Salvador to scale back its Bitcoin dreams to unlock a $1.3 billion loan.
- In Switzerland, Bitcoin advocates are pushing for the Swiss National Bank to include Bitcoin in its reserves. They are aiming to change the constitution by a referendum that requires 100,000 signatures to proceed.
See: UK vs. Canada: A Tale of Two Different Crypto Consumers
- Bhutan quietly built a significant Bitcoin reserve through mining operations powered by hydroelectric energy, now worth $750 million or approx 27.9% of it's 2023 GDP. They are aiming to become a leader in sustainable Bitcoin mining.
- Lugano, Italy, launched Plan ₿, an initiative to integrate Bitcoin into daily life and transform the city’s financial infrastructure. Residents and businesses can use Bitcoin to pay for municipal services, taxes, and even small purchases. Lugano wants to be a blockchain innovation hub to boost the local economy and promote global cryptocurrency adoption.
- Brazilian lawmakers are considering a proposal to invest 5% of national reserves ($18.6 billion) in Bitcoin with the goal of diversifying financial assets and protecting against global risks.
Skeptics Speak Out
Critics are quick to point out Bitcoin's volatility and question whether it's a safe choice for public funds. Ex-U.S. Treasury Secretary Lawrence Summers has called the idea of a national Bitcoin reserve “crazy”, saying Bitcoin is too volatile and lacks the utility of assets like oil or gold. Summers believes that to manage the countries burgeoning debt the U.S. should focus on tax form and budget adjustments instead of betting on crypto.
“Why would the government choose to support a bunch of Bitcoin?” - Summers
See: Marathon Bitcoin Miner Ventures into Whisky Barrels
Closing Outlook
As the global conversation around Bitcoin as a reserve asset is heating up, Vancouver's Mayor Ken Sim is positioning the city as a key player. But it also raises questions about risk, volatility, and public trust.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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