Karsten Wenzlaff, Advisor
August 26th, 2025
Karsten Wenzlaff is a Crowdfunding and Fintech Expert from Germany. He is Secretary-General of Digit[...]
Category Archives: Enterprise, Scaleup
Robinhood Tokenizes Stocks and Launches Blockchain
Tokenization | July 3, 2025
Image: Freepik
Robinhood Opens Tokenized Equity Trading, Staking, and Futures Access While Building a New Digital Assets Blockchain
On June 30, 2025, Robinhood announced a major expansion into tokenized assets and crypto infrastructure during an event in Cannes. The company’s official release detailed its launch of tokenized U.S. equities for EU users, new staking and derivatives products, and the development of a proprietary Layer 2 blockchain designed to support real world asset (RWA) tokenization. It's a clear pivot and global crypto strategy that could define the future of hybrid investing platforms.
Tokenized stocks and ETFs in the EU
Robinhood will allow European Economic Area (EEA) users to buy and sell tokenized versions of over 200 U.S. stocks and ETFs. These digital assets come with no commission, no spread, and include dividend payments, mirroring their traditional equivalents while trading continuously during the week. The tokens are initially issued on Arbitrum but will transition to Robinhood’s newly announced Layer 2 blockchain, which is being developed specifically to support RWA tokenization, self-custody wallets, and instant settlement.
See: Robinhood Acquires WonderFi for C$250M
The EU rollout aims to open access to U.S. equities for hundreds of millions of crypto-enabled users. The goal is to create a multi-asset investment experience that spans stocks, ETFs, and digital currencies all on one unified platform.
Crypto Staking and Perpetual Futures
Robinhood’s expansion also includes the launch of crypto perpetual futures contracts for Bitcoin and Ethereum. These will be offered with up to 3× leverage across eligible EU users, with order routing handled through Bitstamp’s regulated platform. At the same time, Robinhood has introduced staking support for Ethereum and Solana. Staking is already live in the EU and will expand to U.S. users where legally permitted.
Robinhood is also offering deposit incentives, including bonuses of up to 2% on incoming crypto transfers, with the company targeting up to $500 million in new crypto inflows.
Launch of Proprietary Layer 2 Blockchain
Robinhood confirmed that it is building its own Layer 2 blockchain. The network will enable fractional ownership of stocks and ETFs, wallet-native asset recovery, smart contract interoperability, and real time cross-chain bridging. It will also provide the infrastructure for on-chain settlement of financial instruments such as tokenized equities and derivatives. Having it's own blockchain will reduce dependence on third parties while positioning Robinhood to eventually become the protocol layer for its own assets and services, including digital custody and regulated RWA trading.
Rewards, AI, and Advanced Crypto Tools
Robinhood also launched a crypto rewards credit card, allowing users to automatically convert cashback into digital currencies. In addition, the company now lets users choose which crypto or stock purchases to sell first for tax purposes, smart order routing, and high frequency charts designed to support more active traders. A new AI assistant called Cortex is being integrated into the app, offering personalized alerts, market trend recognition, and portfolio analysis for premium users.
See: Robinhood’s WealthTech Push and Lifestyle Finance
All of these updates are part of Robinhood’s broader strategy to become a comprehensive investing ecosystem that spans traditional equities, digital assets, and blockchain infrastructure.
Why This Matters
Robinhood’s stock rose by more than 12% following the announcement. As reported by MarketWatch, the SEC also sent market signals that may be interpreted as supportive. Robinhood has taken advantage of the EU's open approach towards digital finance and pilot models that aren't yet permitted in Canada, raising an important question: if tokenized equities are safe and functional for the EU, what regulatory barriers continue to hold back innovation in Canada?
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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Grayscale ETF Wins SEC Approval for 5 Crypto Assets
Crypto | July 2, 2025
SEC Approves Grayscale ETF With Five Major Crypto Assets, Signalling Broader Regulatory Path for Multi-Asset Funds
On June 27, 2025, the U.S. Securities and Exchange Commission (SEC) officially approved the conversion of Grayscale’s Digital Large Cap Fund (GDLC) into a spot exchange traded fund (ETF). The fund is now listed on NYSE Arca, offering investors access to five major crypto assets in one regulated product. It's the first time that a U.S. spot ETF includes not just Bitcoin and Ethereum but also Solana, XRP and Cardano, establishing a new precedent for how diversified crypto products can be structured and approved under SEC oversight.
What the ETF Holds
The Grayscale Digital Large Cap ETF largely follows the CoinDesk Large Cap Select Index, which rebalances monthly. As of July 1, 2025, the fund holds:
- 80.2% Bitcoin (BTC)
- 10.4% Ethereum (ETH)
- 4.4% XRP
- 3.0% Solana (SOL)
- 1.9% Cardano (ADA)
GDLC now offers direct access to these assets through a public listing.
What Changed
Prior to this approval, GDLC operated as a closed-end trust on OTC markets. It lacked daily liquidity and tradeed at a discount or premium to the fund’s net asset value. The new ETF lets large investors swap crypto directly for shares in the fund, and vice versa, which helps align market prices with the actual value of the crypto held.
See: SEC Advances XRP ETF Review, Investors Await Decision
Grayscale completed the conversion of approx $775 million USD in assets by the SEC’s July 2 compliance deadline, making the ETF now the largest multi-crypto fund of its kind in the United States.
Implications of the SEC's Approval
This is the first time U.S. investors can now access a range of large-cap crypto assets, beyond just Bitcoin and Ethereum, through a regulated spot ETF. It reduces the need to manage separate holdings or rely on offshore exchanges.
Analysts now estimate a 95% likelihood that ETFs for XRP, Solana, and Litecoin will be approved in the U.S. later this year. Major firms including Bitwise and Franklin Templeton have already submitted filings.
This approval reinforces legal and regulatory precedent and build's on Grayscale’s 2023 legal victory, which challenged the agency’s rejection of a Bitcoin ETF. That ruling continues to impact how the SEC responds to ETF applications. It also highlights the SEC's evolving policy on crypto including assets that were previously under regulatory scrutiny such as XRP. The SEC is now clearly willing to consider broader crypto exposure in compliant funds, even while legal classification questions remain up in the air.
See: SEC Clears Crypto Staking. What It Means for Canada
The door to broader index-based crypto products is likely to follow, such as new ETFs tied to crypto indices, sector themes, and/or platform categories. See NCFA’s article on the crypto ETF battle intensifying with XRP, Solana, and Dogecoin.
Canadian Lens
Canada continues to lead with crypto ETF adoption. The Purpose XRP ETF launched on the TSX on June 18, 2025, while Canadian investors already have access to ETFs for Bitcoin, Ethereum, and Solana. See also NCFA’s report on Canada’s first Solana spot ETF with staking.
For Canadian fintechs and investors, growing alignment in North American regulation signals an opportunity to expand services built around compliant digital asset products. As U.S. markets open up to a wider mix of crypto ETFs, Canadian firms offering custody, compliance, or portfolio tools will be well positioned to support cross-border demand and deepen product innovation.
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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Canadian Clio Acquires American vLex for US$1B
Acquisition | June 30, 2025
Image: Freepik AI
Clio to Buy vLex in One of the Largest Legaltech Deals Ever
On June 30, 2025, Burnaby-based Canadian legaltech firm Clio announced that it entered into a definitive agreement to acquire U.S. firm vLex for $1 billion USD in cash and stock. This is the largest acquisition in Clio's history and one of the most significant software deals ever led by a Canadian company. The deal merges Clio's legal operating system with vLex's AI-powered research platform to create a unified and intelligent legal system.
See: Canuck Startups Cohere and Clio Secure Major Funding Rounds
The combined platform currently serves over 200,000 legal professionals and includes vLex’s multilingual legal database and its AI engine Vincent, already trusted by law firms, courts, and legal associations in more than 110 countries.
The deal is expected to close later in 2025, pending regulatory approvals. Clio was advised by Goldman Sachs, with legal support from Osler, Hoskin & Harcourt LLP, Wilson Sonsini, and Gowling WLG. vLex was advised by J.P. Morgan, with legal counsel from A&O Shearman and Uría Menéndez. See the vLex announcement
Combining Legal Research and Practice with AI
Clio’s system simplifies firm operations while vLex’s technology provides legal insight across jurisdictions. Together, imagine a legaltech platform that combines task management, research, drafting, and smart analysis all in one place. By uniting all of these functions, the platform can support small firm use cases all the way to enterprise workflows in a single system.
See: Calgary’s Modular Raises Key Insurtech Funding Round
Jack Newton, CEO and founder of Clio, said this is the beginning of a new era for the company and the legal profession. It didn't happen overnight. For seventeen years Clio has built tools to help law firms run efficiently. Now, jointed with vLex, it can add intelligence that understands legal content. Newton explained this further in a conversation with LawNext.
What the Deal Says About Legal AI and Canada’s Role
The times are changing in legaltech. According to the Q2 2025 Emerging Tech SaaS Report from PitchBook (subscription required), vertical SaaS acquisitions have increased by over 40% this year. Companies are integrating domain specific AI into platforms that combine workflow with insight. Clio and vLex are now a clear example of that trend.
vLex’s Vincent AI is capable of analyzing legal documents, audio, and video, and it can also support legal theory testing and custom workflows. These capabilities are essential for trusted, high value use cases in regulated environments, and they are creating an entirely new category of intelligent legal infrastructure.
Why This Merger Matters for Investors and Policymakers
vLex is backed by Oakley Capital, a UK based private equity firm. Clio's deal is Oakley’s third major legaltech exit in the past two years, pointing to the growing maturity of legal intelligence platforms.
See: Botpress Raises $25M USD to AI Agent Infrastructure
Canadian policymakers should take notice of what's possible when national tech companies are supported in scaling globally. It offers a template for other sectors from finance to insurance to healthcare where regulated services require trusted, explainable AI. The acquisition is showing how these platforms can work in practice across different levels of complexity and jurisdictions.
Outlook
Clio's deal puts a Canadian company in a leading position in global legal AI, and offers a model for how other high trust sectors could follow. That is how intelligent systems based on the knowledge economy, trusted data, and applied AI are likely to impact professional services in the years to come.
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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Conquest Planning $80M USD to Expand AI Financial Advice
Financial Planning | June 27, 2025
Image: Freepik/Rawpixel.com
Goldman Sachs Leads Funding to Grow Personalized Financial Planning for Families in Canada, the U.S. and U.K.
On June 23, 2025, Winnipeg-based financial technology company, Conquest Planning, announced they had raised $80 million USD ($110 million CAD) Series B financing round led by Growth Equity at Goldman Sachs Alternatives. The round also includes participation from Canapi Ventures, BDC Capital, Citi Ventures, TIAA Ventures, USAA, Portage, and BNY.
Founded in 2018, Conquest provides AI-powered financial planning software used by more than 1,000 organizations across Canada, including RBC, Manulife, Raymond James, and BNY Pershing. The company’s Strategic Advice Manager (SAM) platform has already generated over 1.5 million financial plans.
See: Fintech Trends & Predictions Across Generations in 2025
This new capital injection will fund Conquest’s expansion into the United States and United Kingdom, while accelerating the launch of two product innovations
- SAM Bytes, a new lightweight digital tool designed for self-directed investors
- Advanced estate and legacy planning features for high net worth and multi generational clients
Key Facts About Conquest Planning's Series B
- $80 million USD raised in Series B
- Goldman Sachs Alternatives is the lead investor
- Conquest has powered 1.5 million financial plans
- Platform used by more than 1,000 firms across Canada
- New features include SAM Bytes and estate planning tools
- Expansion now targeting U.S. and U.K. markets
- Backers include Canapi Ventures, Citi Ventures, BDC Capital, TIAA Ventures, USAA, Portage, and BNY
Financial Planning Gaps Affect Families Across Income Levels
This investment comes at a time when personalized financial advice is out of reach for many Canadians. NCFA’s recent review of financial planning gaps based on data from the Financial Conduct Authority unveils several underserved segments, including:
See: The Financial Impact of Post-Secondary Education and Reasons to Plan Early
- Held back by life events such as illness, divorce, or job loss
- Financially stretched, living month to month with limited savings
- Reluctant to engage due to distrust in financial institutions
- Getting by with basic financial stability but little long-term planning
These segments often rely on informal advice, lack access to tailored planning tools, or simply avoid engaging with the financial system altogether. Conquest’s scalable and accessible tools have the potential to close some of these gaps.
The introduction of SAM Bytes aims to bring quality financial planning to families who are not currently served by human advisors. This is especially relevant for households navigating complex financial decisions, such as starting a business or expanding a family.
Outlook
Demand is growing for platforms that provide affordable, real-time, and personalized advice built on real data and delivered in plain language. For NCFA members working on financial inclusion, wealth building, and life stage transitions, Conquest Planning is one to watch.
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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Coinbase MiCA Licence Unlocks Europe Wide Crypto Access
Coinbase | June 25, 2025
Image: Freepik/macrovector
Coinbase’s EU Licence Highlights How Unified Crypto Rules Unlock Market Access (while Canada faces pressure to modernize)
Coinbase secures a Markets in Crypto Assets (MiCA) licence in Luxembourg and unlocks access to all 27 EU member states under one regulatory framework. The licence allows Coinbase to provide regulated custody, trading, and token services across Europe without reapplying in each country.
MiCA is the EU’s first unified crypto regulation. It sets common rules for disclosures, capital requirements, and consumer protection. Coinbase is among the first major global exchanges to receive full MiCA approval, joining a wave of early adopters now operating across the EU under a unified licence. Market wide compliance in the EU is now real, and opens up a single market of 450 million people under consistent regulatory oversight.
Canada’s Regulatory Challenge
Canada uses a mix of federal registration through FINTRAC and provincial securities oversight. While there is a securities passport system under the Canadian Securities Administrators (CSA), it's not uniformly applied across all provinces. Ontario, for example, requires dual filings. The system also does not unify crypto regulation or streamline compliance across federal and provincial levels.
See: U.S. Passes First Stablecoin Law with GENIUS Act
In contrast, MiCA offers a single licence with direct access across all EU countries. For Canadian fintechs, this structural difference adds complexity and slows growth. Canada’s fintech sector must now compete with peers operating under unified rules, faster timelines, and lower costs.
Canada's Missed Opportunity
In a June 2025 opinion piece for Cointelegraph, Jillian Friedman, COO of Symbiotic, warned that Canada risks losing ground:
“While other countries move toward integrating crypto into their financial systems, Canada is lagging, costing the country capital, talent and competitiveness.”
Crypto policy was grossly missing from all federal party platforms during the 2025 election, a “missed opportunity” at a time when early-stage VC activity is dropping and top STEM talent continues to leave. Friedman doubled down on Canada's issues including:
- Canadian seed-stage VC deals hit pandemic-era lows in Q1 2025 (according to CVCA data)
- CSA’s classification of stablecoins as securities continues is 'wrong' and will restrict adoption
- Crypto firms struggle to open basic bank accounts, even when AML risk is low
- Up to two-thirds of software engineering graduates are exiting Canada
See: SEC Clears Crypto Staking. What It Means for Canada
She argues that Canada should move quickly to unlock access to capital, offer tax incentives, and remove policy barriers if it wants to remain competitive.
Other Major Crypto Firms with MiCA Licenses
Several global firms have followed Coinbase in securing MiCA licences:
- Crypto.com, OKX, and Bitpanda received MiCA authorization in early 2025
- Bybit gained approval from Austria’s FMA in May 2025
- BitGo received its licence via BaFin in Germany
- MoonPay, BitStaete, ZBD, and Hidden Road secured early approvals in the Netherlands
Now do those same crypto firms also operate in Canada?
While several MiCA-licensed firms also operate in Canada the split below shows how global players are prioritizing the EU as a unified growth market, while (possibly) treating Canada as a smaller fragmented market.
See: UK FCA Plans Full Crypto Licensing Regime by 2026
| Firm | MiCA Licence | Canadian Operation |
| Coinbase | Yes | Yes (OSC restricted dealer) |
| Crypto.com | Yes | Yes (OSC restricted dealer) |
| OKX | Yes | No active registration |
| Bitpanda | Yes | No active registration |
| Bybit | Yes | Previously fined in Ontario; no active registration |
| BitGo | Yes | No known retail presence |
Why This Matters for Canadian Competitiveness
MiCA offers a clear example of how coordinated regulation can improve access, speed, and investor confidence. Prime Minister Mark Carney’s pledge to reduce interprovincial trade barriers could open the door to change, but digital asset policy must be part of the conversation.
See: The Crisis Canada and Fintech Can’t Afford to Waste
Without reducing regulatory burden and interprovincial barriers, Canada risks falling behind not because of lack of innovation but because of unclear rules that limit scale, delay market access, and create friction for investors.
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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Honouring Andrew Moor’s Innovation Legacy
Banking | June 25, 2025
Andrew Moor’s Leadership Helped Shape Modern Banking in Canada
The National Crowdfunding & Fintech Association of Canada (NCFA) is deeply saddened by the sudden passing of Andrew Moor, President and CEO of Equitable Bank, (EQB) over the weekend of June 21–22, 2025 per the Financial post. Moor was a bold and thoughtful leader who believed in making Canada’s financial system more innovative, digital, and inclusive.
See: Why Canada must be open to open banking
As CEO since 2009, Moor led Equitable Bank’s transformation into a technology-forward institution known for its direct-to-consumer offerings and fintech partnerships. EQ Bank, the digital arm of Equitable, became one of Canada’s most trusted alternatives to traditional banking under his leadership. His forward-looking vision earned admiration across the financial sector, including from those of us at NCFA.
A Builder of Progress, Not Just Institutions
Moor supported open banking frameworks, digital infrastructure reform, and meaningful collaborations between regulated banks and emerging fintechs. He served on the board of the Canadian Bankers Association and consistently advocated for innovation that benefits Canadian consumers.
His leadership helped create new paths for collaboration between incumbents and innovators, something that NCFA has long supported.
Closing
Andrew Moor’s contributions advanced financial innovation in Canada. His sudden passing is a loss to all who care about the future of finance, technology, and inclusion. NCFA extends heartfelt condolences to his family, colleagues, and the entire team at EQB.
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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Canada to Implement Digital Tax Despite U.S. Pushback
Digital Tax | June 23, 2025
Freepik - Rawpixel.com, taxes
Ottawa to Enforce 3% Digital Tax Despite U.S. and Industry Pushback
*Update: On June 29, 2025, the federal government of Canada rescinded it's DST tax, a good faith tactic ahead of CUSMA negotiations.
As reported by CTV News, the Minister of Innovation, Science and Industry François-Philippe Champagne said on June 19, 2025 that Canada will not delay or pause the 3% Digital Service Tax (DST), even as U.S. lawmakers and Canadian business groups continue to voice strong opposition, setting the stage for further potential trade retaliation from the United States.
What Is the DST and Who Does It Affect?
Canada's Digital Service Tax act passed into law in 2024 and will be retroactively applied from January 1, 2022, with initial payments due by June 30, 2025. It targets tech giants earning over €750 million globally and at least $20 million CAD in annual Canadian digital revenues from online advertising, digital marketplaces, and user data monetization.
Why Is the U.S. Pushing Back?
Critics argue the DST unfairly targets American firms like Meta, Amazon, Google, Uber, and Airbnb and risks violating Canada’s commitments under the OECD/G20 Inclusive Framework and the Canada-US-Mexico Agreement (CUSMA).
See: U.S. Tax Bill Could Drive Capital Back to Canada
On July 11, 2024, members of U.S. Congress in a bitpartisan letter, urged the Biden administration to consider punitive tariffs, if Canada proceeded unilaterally with the tax. American tech lobby groups, including the Information Technology Industry Council and the Computer and Communications Industry Association, have issued statements warning of double taxation and negative impacts on investment.
How Are Canadian Businesses Responding?
Canadian organizations including the Chamber of Commerce and the Retail Council have also raised alarm about economic consequences. They say the DST will increase consumer prices, destabilize bilateral trade, and hurt Canadian competitiveness.
What Is the Government’s Rationale?
Yet the federal government insists the measure is necessary to ensure fair tax treatment and close loopholes for global digital firms operating in Canada. Champagne said Canada is prepared to defend its position and stressed that domestic companies must not be disadvantaged by outdated tax systems.
What Does This Mean for Canadian Fintechs?
NCFA recently wrote an article about the DST compounding pressure points for Canadian fintechs, already facing increased costs from Trump's tariffs. The combined regulatory and trade barriers could slow growth, raise compliance burdens, and weaken investment flows in a critical sector to Canada’s innovation strategy.
Which Other Countries Have Imposed Similar Taxes?
Canada is not alone. Countries including France, Italy, Spain, Austria, the United Kingdom, Turkey, and India have also enacted unilateral digital services taxes, citing similar concerns about tax fairness in the face of untaxed digital revenues.
These countries share several traits. They have large and growing digital user bases, limited ability to tax foreign digital giants under the current rules, and political pressure to rebalance domestic tax fairness. And many of these nations have grown impatient with the slow pace of OECD reform and acted independently.
See: Who Will Canada’s New 3% Digital Services Tax Impact?
Multinational firms like Google, Meta, and Amazon often avoid local corporate tax obligations by recording revenue in lower tax jurisdictions, even when earning substantial income from users in countries with no physical business presence. DST programs in these countries are their attempt to capture their share of this otherwise untaxed activity.
Why Have Germany and Japan Held Back?
In contrast, countries like Germany and Japan have avoided unilateral DSTs. Despite facing the same digital tax gap, they prioritize maintaining stable trade and diplomatic relations with the United States and remain committed to resolving the issue through OECD-led multilateral reform. They fear that unilateral DSTs could provoke retaliatory tariffs or disrupt broader trade relationships. Their restraint is shaped by economic strategy, geopolitical alignment, and their deeper integration with U.S. supply chains.
Where Does Canada Stand Among DST Critics?
By pushing forward with a DST in 2025 despite U.S. threats, Canada is one of the more assertive jurisdictions globally and at the forefront of U.S. DST activities. Its approach reflects growing domestic political pressure to tax digital activity fairly, even if it risks short-term diplomatic tension. However, it also positions Canada as a potential target for trade retaliation if a negotiated OECD solution is not reached soon.
Are There Alternatives to Canada’s DST?
Instead of enforcing a unilateral DST, Canada could explore alternative policy paths. One option is to delay implementation and condition it on measurable progress in OECD multilateral negotiations. This approach could defuse trade tensions while preserving Canada’s leverage. Another path is a bilateral tax agreement with the United States targeting large digital firms.
See: Canada’s Rising Tax Burden and Fintech Opportunities
Canada could also consider expanding existing corporate tax rules to capture significant economic presence in the digital space, without relying on a standalone DST.
A final alternative is to introduce temporary digital levies that phase out automatically once an OECD framework is enacted, aligning political accountability with global reform timelines.
Why It Matters
The digital services tax and U.S. trade threats are now intertwined, creating uncertainty for fintechs operating in or expanding into Canada. Companies should monitor policy developments closely. As geopolitical and regulatory pressures escalate, nimbleness and smart coordinated action will be key to maintaining innovation, competitiveness, and market access.
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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