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
Rails’ Hybrid Crypto Exchange and $14M Raise
Launch & Financing | June 9, 2025
Image: Freepik
Rails Launches Innovative Hybrid Crypto Exchange After Closing $14 Million USD
Toronto-based startup Rails has launched a new hybrid crypto exchange model after raising $14 million USD through a token warrant sale to institutional backers led by Kraken and other investors Slow Ventures, CMCC Global, Quantstamp, and Round13 Capital. The platform uses zero knowledge proofs to verify asset custody without revealing user balances and combines the benefits off off-chain trading speed with on-chain settlement transparency.
A Hybrid Model at Scale
Rails' model separates the trade execution layer from asset custody. Orders are matched off-chain using a central limit order book, while asset settlement occurs on-chain using zk-proofs and Merkle tree-based attestations.
According to CoinDesk, the system is built on Kraken’s L2 scaling protocol, Ink, which enables Ethereum settlement with reduced costs. This approach blends traditional exchange performance with DeFi-style auditability.
See: DeFi Technologies Begins Nasdaq Trading in Global Expansion
Commenting to Decrypt, co-founder Satraj Bambra said:
“We wanted to fix two broken pieces in crypto exchanges—proof of reserves and instant access to funds. This infrastructure is designed to do that at scale.”
Addressing Canadian Market Gaps
Since the collapse of QuadrigaCX in 2019 and other incidents like the global fallout from FTX in 2022, Canada's crypto markets have remained cautious with regulators tightening rules on custody, trading platforms, and investor protection.
Rails’ technical achievement and architecture directly addresses Canadian regulatory concerns by removing custodial opacity and verifying user funds in real time. Having said that, while the company is based and founded in Toronto, it chose to incorporate in the U.S. due to regulatory constraints at home in Canada.
See: SEC to Host Policy Roundtable with DeFi Builders
In an interview with BetaKit, co-founder Satraj Bambra explained:
“Regulations are a choke point for innovation, and you have to find a good middle ground between good regulation and fostering innovation… You go where you’re welcome. [In Canada], we’ve lost that balance.”
While Rails hasn't explicitly said that it hopes Canadian regulators are open to reform, it's own product design of verifiable reserves, decentralized custody, and zero knowledge settlement is the type of infrastructure Canada’s crypto sector has increasingly called for. If domestic policy evolves, platforms like Rails could serve as an excellent blueprint.
Implications for Fintechs and Platforms
Rails’ model could lower the compliance burden for Canadian platforms by building transparency into the technical architecture. From a venture and infrastructure perspective, the startup’s $14 million token warrant sale format is also notable.
See: OSC Crypto Trading Platform Compliance Review Findings
It avoids traditional equity dilution while aligning investors with network usage and governance. For Canadian fintechs seeking capital, tokenized structures may see an uptick in interest, especially if paired with products gaining traction.
Outlook
Time will tel if Rails can capture significant trading volume but the launch and funding furnishes it with momentum to continue reinventing crypto systems with transparency and composability from the ground up. Rails' crypto infrastructure innovation could boost other homegrown efforts, including regulators who may be watching and learning too.
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
 |  |  |
|---|---|---|
 |  |  |
Web Summit 2025: Where AI, Finance & Values Collide
Tech Ecosystem | June 6, 2025
Image: Freepik/travelscape
Technology With Purpose Drives Fintech, AI, and Brand strategy in Vancouver
Web Summit Vancouver 2025 ran from May 27-30 2025 at the Vancouver Convention Centre attracting 15 727 attendees and with 1 108 startups from 117 countries, creating an electric atmosphere of discovery and deal making. Exhibiting startups spanned innovations in AI and machine learning, fintech and financial services, healthtech and wellness, and sustainability and cleantech.
See: Google Veo 3 Brings New Tools for Fintech Teams
Fintech solutions ranged from digital banking apps to blockchain payment rails, with Koho introducing a new international transfer service at the event. Founders pitched ideas, investors scouted opportunities, and conversations ranged from regulation to real-time fraud detection, confirming Canada’s growing role in global fintech innovation.
Select Takeaways
1. Consumer Trust and Brand Authenticity
In the “Brands in Uncertain Times” session, Angus Reid of Angus Reid Group shared that nearly 50% of Canadians “vote at the cash register” by choosing brands aligned with their values. FCB Global CEO Tyler Turnbull added that Canadian consumers will pay 20-30% more for products produced and sourced in Canada, the premium on authenticity. For fintech companies, transparent fee structures and clear brand messaging are key to building consumer trust and loyalty.
2. AI Infrastructure Accelerates Fintech Innovation
AI dominated most panels, hallway discussions, and featured prominently across multiple stages. Sunny Madra, COO of Groq, announced Groq is now the exclusive inference provider for Bell Canada’s sovereign AI network, including two new data centres in British Columbia designed to bring AI processing closer to Canadian users. This new AI infrastructure will benefit fintech startups seeking access to low-latency, secure AI inference capabilities for real-time applications like fraud detection and compliance.
3. Sustainability and ESG Integration in Tech
Sustainability and cleantech stood out alongside AI. Sessions highlighted how technology is driving environmental, social, and governance (ESG) goals, such as using AI to identify and price climate risks. Partners like OVHcloud showcased energy efficient cloud offerings, illustrating how infrastructure providers integrate ESG criteria into their services. For fintechs, embedding ESG considerations into product design and investment decisions is key for long term success. Not to mention the Competition Bureau's final rules on greenwashing that companies need to comply with.
4. Fintech Innovations and Cross-Border Payments
Financial technologies and services was one of the top represented verticals, with companies demoing solutions from digital banking apps and blockchain payment rails to regtech platforms. Toronto-based challenger bank Koho introduced its international money transfer service to over 190 countries, promising most transfers would arrive within 30 minutes during beta. By addressing opaque rates and slow settlement times, Koho’s launch shows how fintechs who listen to consumer issues can earn trust and turn these insights into new products/services that resonate with both Canadian and global markets.
5. Inclusive Entrepreneurship and Diverse Teams
44% of startups at Web Summit Vancouver were founded or co-founded by women. Beyond fintech, local firms such as Doubl, Revol Cares, and Aruna Revolution showcased solutions for women’s health and wellness.
See: Where the Gaps Are: Fintech Insights from FCA Data
Within financial services, fintech teams highlighted embedded credit services for underbanked populations and regtech platforms that serve diverse small-business owners. It's really diverse founding teams that drive not just inclusive entrepreneurship but solutions that resonate with underserved markets, strengthening innovation overall.
Closing Thought
Technology is no longer judged only by what it can do, but by who it includes, what it protects, and how it earns trust. For fintechs and founders alike, this is the real edge of innovation and frontier.
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
| | |
|---|---|---|
| | |
Fintechs Face New Green Claim Rules Under Competition Act
Regulation | June 6, 2025
Image: Freepik
Fintechs Need to Verify Green Statements With Facts or Face Enforcement
On June 5 2025, the Competition Bureau of Canada released final guidelines for greenwashing rules. The new rules apply to any business making environmental claims when selling products or promoting business activities including financial tech companies, ESG platforms, green loan providers, carbon credit startups, and any firm using green language in advertising, websites, or investor materials.
See: Canada’s Competition Plan Is Getting More Serious
These updated guidelines reflect changes to the Competition Act which began on June 20, 2024. The law now clearly defines when green claims are allowed and what kind of evidence is needed to support them. The Bureau says they developed the final rules after reviewing over 400 public submissions, and are now in force. Now any firm that makes an environmental claim about it's product or business must be ready to prove it with fact-based evidence and proper documentation.
What the New Rules Mean
There are two provisions in the new Competition Act about greenwashing, (1) one about environmental benefit claims of individual products; and (2) another about environmental claims about a company and its business activities.
If a fintech makes a green claim about a product (i.e., protects the environment or reduces harm), it must be backed by suitable testing before the claim is made. Anecdotal evidence such as customer reviews or sales figures are not proper testing.
See: Planetary Health Check 2024 and Canadian Climate Tech
If a fintech claims that the company is environmentally responsible or heading toward net zero, then the claim must meet a reliable standard or an accepted protocol in Canada and internationally, including frameworks like ISO 14064 or GHG Protocol.
The Bureau makes it clear that companies must not exaggerate environmental benefits. Can't be vague or use 'feel good' language like 'eco-friendly' or 'sustainable' unless the claim is backed by specific evidence. For example, a product that uses 20% recycled packaging cannot advertise itself as 'environmentally neutral' unless the rest of the product has been tested to meet that standard.
Claims about future benefits, such as achieving carbon neutrality by 2030, require a clear and verifiable plan with interim targets and real progress tracking towards that goal.
Implications for Fintechs
There are numerous green financial products from lending products tied to home retrofits, solar energy or electric vehicles to 'low carbon' investment portfolios that will be impacted. If these products are being advertised as good for the environment or tied to climate goals then firms must now have data/documentation to support those claims or face enforcement.
See: Report: ESG Ratings and Data in Financial Services – Practitioners Perspective
- So, an AI robo-advisor offering a green investment plan must clearly show how each fund or investment in that portfolio qualifies based on accepted criteria.
- A lending platform that advertises 'net zero mortgages' must be able to document the full environmental impact analysis of the financial model, such as how energy savings are calculated and measured.
- Fintechs making environmental claims for investor presentations or in public materials, or in consumer advertisements, website copy etc all face the same legal standard.
The Bureau expects to see testing evidence before any green claim is made. What was the methodology used to support the green claim and is it internationally recognized and suitable in the Canadian context.
Enforcement and Significant Risk
Penalties for corporations can reach up to $10 million for the first violation and $15 million for every violation thereafter. Also, if the value derived from the green claim benefit cannot be accurately measured, then the penalty can be up to 3% of the corporation's global gross revenue. The Bureau has already taken enforcement action in previous greenwashing cases, including against Keurig and Volkswagen.
Also as of June 20, 2025, individuals and private organizations can apply directly to the Competition Tribunal to challenge misleading green claims, opening the door for private sector oversight and potential legal action from investors, competitors, and consumer advocates.
See: Canadian Banks Face Scrutiny Over Sustainability Claims
There is however one safeguard for companies, which is a due diligence defence. If a fintech can show that it took reasonable steps to verify its claims and they followed recognized practices, it may help them avoid fines. Going forward, the pressure and burden is on companies to have robust compliance and documentation from engineering product development teams to marketing.
Outlook
The bar is raised. For fintechs operating in Canada, green language can no longer be used for branding and promotion without properly being supported as it's a legal risk. Having said that, Canadian fintechs that can back up their green claims and properly document them will improve credibility with customers, regulators and global partners alike. Now how many of the banks will back off from their environmental claims?
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
| | |
|---|---|---|
| | |
Circle Soars 235% Intraday in Historic Stablecoin IPO
Fintech IPO | June 5, 2025
USDC Issuer Circle Rises $1.1 billion Reaching $22 billion Valuation on NYSE IPO
June 5, 2025 will be on the record books as Circle's IPO, making history as the first stablecoin issuer to go public. Trading under the symbol CRCL, Circle’s shares opened at $69 and surged as high as $103.75 (235% above the IPO price of $31 that institutional investors access) before closing at $83.23.
The listing raised $1.1 billion, giving Circle a fully diluted market value of more than $22 billion. Lead underwriters included JPMorgan, Citigroup, and Goldman Sachs, with major investors including BlackRock and ARK Invest.
See: Circle Files for IPO as Crypto Firms Eye Wall Street
The scale and speed of Circle's pricing surge can only mean one thing; regulated crypto finance has arrived on Wall Street. This could be one of the most important public listings in the transformation and growth of digital finance and could open the door a steady stream of fintech IPOs who have been waiting for this very moment to arrive.
By the Numbers
- IPO price: $31
- Opening price: $69
- Intraday high: $103.75 (+235%)
- Closing price: $83.23 (+168%)
- Shares offered: 34 million (upsized twice due to investor demand)
- Total raised: $1.1 billion
- Market cap (fully diluted): Over $22 billion
Circle’s Model and Risks
Circle reported $1.68 billion in revenue and $156 million in profit in 2024. Over 99% of that revenue came from interest earned on the reserves backing USDC, primarily in USD and short-term treasuries. According to Circle Internet Group's S1 filing, a 1% drop in interest rates could reduce annual revenue by $441 million.
Notably, Circle has begun monetizing blockchain services, subscription products, and network fees. These newer offerings brought in $20.7 million in Q1 2025 and are expected to scale.
See: Circle Becomes First Stablecoin to Meet Canadian VRCA Rules
Distribution costs remain a challenge however with Circle paying $1 billion in distribution fees in 2024, with the majority of that going to Coinbase. It's main stablecoin competitor, Tether, pays zero distribution fees.
Why This IPO Matters
USDC is the second largest stablecoin globally (27% market share). Circle’s IPO means that stablecoins are no longer niche tools for crypto trading but they are becoming key infrastructure for digital payments, cross-border flows, and mainstream financial innovation.
Circle has gone through some twists and turns in recent years, including cancelling a $9 billion SPAC deal in 2022, surviving the Silicon Valley Bank crisis in 2023, and rejecting a $4-5 billion acquisition offer from Ripple earlier this year (Coinbase also expressed interest). But Circle played their cards right and chose the full IPO route which created value of over 4 x those private offers. Circle's IPO also shows that the market rewards companies that take a regulated approach.
The Fintech IPO Pipeline
Circle’s public debut could jumpstart other fintech listings. Companies reportedly preparing IPOs include:
- Ripple (blockchain payments)
- Chime (digital banking)
- Klarna (buy now pay later)
- Ledger (crypto custody)
With Circle’s success, the IPO window appears to be opening again.
Outlook
Circle’s IPO proves that regulated digital asset companies can scale and go public. It’s a reminder that Canada needs to ensure there's a clear framework for stablecoins. Without one, high-growth companies will continue to launch and grow within U.S. markets instead.
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
| | |
|---|---|---|
| | |
How specialized agencies are transforming fintech recruitment in Canada
June 3, 2025
The fintech industry in Canada is experiencing significant growth, driving a surge in demand for highly skilled professionals. This expansion necessitates innovative recruitment strategies to meet the sector's evolving needs. Specialized agencies in Toronto are pivotal in navigating this dynamic landscape.
As the fintech sector expands across Canada, companies face an unprecedented demand for talented individuals who can propel them forward. This burgeoning industry requires not only technical expertise but also innovative thinking to maintain its competitive edge. Recruitment agencies in Toronto play a crucial role in meeting these demands by sourcing top-tier talent effectively. Leveraging cutting-edge technology, these agencies facilitate connections between candidates and employers, ensuring the right fit for the intricate demands of fintech roles.
The impact of artificial intelligence on recruitment
Artificial intelligence (AI) is transforming how recruitment processes operate within the fintech sector. By automating repetitive tasks, AI enables recruiters to focus on strategic decision-making and candidate engagement. This technological advancement enhances efficiency, allowing recruitment efforts to scale with the industry's rapid growth. With AI, you can expect more precise matching between job requirements and candidate skills, reducing the time and resources spent on finding suitable candidates.
Furthermore, AI-driven analytics provide valuable insights into talent acquisition trends and candidate behavior. These insights help recruitment professionals tailor their strategies to attract and retain top talent effectively. By leveraging AI, companies can streamline their hiring processes, making them more agile and responsive to market changes. For fintech companies, this means being able to quickly adapt to new technologies and methodologies that continue to emerge in this fast-evolving sector.
The integration of AI into recruitment also enhances the accuracy of candidate assessments. Automated screening processes can efficiently evaluate qualifications and experience, reducing human error and bias. This ensures a more objective selection process that focuses solely on merit and potential contribution to the company.
Challenges in finding top talent
The competitive landscape for recruiting top executives in fintech is intensifying as more companies vie for a limited pool of qualified candidates. Specialized recruitment agencies are essential partners in this endeavor due to their deep understanding of industry nuances. These agencies possess networks and resources that significantly enhance their ability to identify and attract high-caliber professionals who may not be actively seeking new opportunities.
For you as an employer, partnering with these agencies offers access to a broader spectrum of candidates who possess the specific skills needed for success in fintech roles. The agencies' expertise allows them to quickly pinpoint candidates who align with your company's culture and strategic goals. This tailored approach is invaluable in an environment where technical prowess alone isn't enough; cultural fit is equally crucial for long-term success.
Specialized agencies provide you with strategic advice on competitive compensation packages and market trends, ensuring your offers are both attractive and realistic. Their insights help you remain competitive not just in terms of salary but also in work culture and professional development opportunities.
Specialized agencies in Toronto
Recruitment agencies based in Toronto offer unique advantages when it comes to sourcing fintech talent. Their location at the heart of Canada's financial hub provides them with direct access to a vibrant pool of professionals immersed in the industry. These agencies have honed their expertise by working closely with fintech firms, gaining an intrinsic understanding of what makes an ideal candidate for this sector.
See: What Gen Z and Millennials Expect From Fintech
The depth of knowledge these agencies possess about industry-specific challenges enables them to craft customized recruitment strategies that meet your company's exact needs. They excel at identifying candidates who not only meet technical qualifications but also align with your organizational values and vision for growth.
The strategic positioning of these agencies allows them to stay abreast of industry developments and adapt their approaches accordingly. They continuously refine their methods based on emerging trends, ensuring they remain effective intermediaries between employers like you and potential hires.
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
| | |
|---|---|---|
| | |
Fintech Grows 3x Faster, 97% of Market Still Untapped
Global Fintech Report | Jun 2, 2025
Image: Cover of Scaled Winners and Emerging Disruptors (June 2025, BCG and QED Investors)
Fintech is Outgrowing Banks at Triple the Speed BUT Has Only Captured 3% of Global Revenue
The Boston Consulting Group (BCG) and QED Investors, just published a June 2025 report titled, "Fintech’s Next Chapter: Scaled Winners and Emerging Disruptors" (38 page PDF), highlighting that global fintech revenues rose 21% in 2024 compared to 6% for traditional financial institutions. That confirms fintech showed a strong rebound across sectors, accelerating from the prior year, after a couple of years of tightening capital markets and heightened regulatory scrutiny.
Payments, challenger banks, and trading platforms led the way
- Challenger banks like Nubank, Revolut, and Monzo grew deposit revenues by 23%
- Trading and investment fintechs including crypto platforms like Coinbase, grew 21%
- Public fintechs became more profitable too, with average EBITDA margins rising to 16% (25% increase year-over-year)
- Nearly 70% of public fintechs were profitable in 2024, compared to less than half in 2023
While growth is strong, fintechs remain a small fraction of global financial services
See: 2024 Global Fintech Funding Insights for Investors & Founders
In 2024, fintechs generated $378 billion in revenue, while traditional banks and insurers earned $12.7 trillion. Fintechs have captured just 3% of this revenue, so 97% is still in the hands of incumbent financial institutions.
Global scaling fintech revenues 2024
- United States accounted for 50% of scaled fintech revenues, roughly $118 billion
- China at 16%
- Europe 8-10%
- Asia Pacific (excluding China) 8-10%
- Latin America 8-10%
- Middle East and Africa combined ~1% (or $3 billion)
Five verticals where fintechs are winning
There are roughly 100 scaling fintechs earning over $500 million annually of which these 5 verticals dominate revenue generation:
See: Tailscale Raises $230M to Power Identity-First Networking
- Payments ($126 billion)
-
- PayPal – US-based leader in digital wallets and merchant services
- Apple Pay – A key player in digital wallets and mobile-based consumer payments
- Merchant software and card processors ($50 billion)
-
- Shopify – Canadian e-commerce platform that integrates payments, widely recognized as a vertical SaaS leader
- Toast – US-based vertical SaaS for restaurants, offering POS systems with built-in payments
- Challenger banks ($27 billion)
-
- Nubank – Brazilian neobank with rapid growth in Latin America
- Revolut – UK-based global challenger bank, expanded into multiple markets
- Crypto trading ($16 billion)
-
- Coinbase – US-based crypto exchange listed on NASDAQ
- Binance – Global crypto trading platform with strong international volume
See: SEC Clears Crypto Staking. What It Means for Canada
- Buy now pay later and point of sale lending: $8 billion
-
- Affirm – US-based BNPL leader, publicly traded
- Klarna – Swedish BNPL company with major European and North American presence
These five sectors represent most of the $231 billion in scaled fintech revenue. Payments alone represent 55% of that total. Challenger banks and crypto platforms hold a smaller but growing share.
There's room for growth with over 150 IPO-ready fintechs
There are 150 global fintechs founded before 2016 that have raised over $500 million in equity and remain private. Many are waiting for improved conditions in the capital markets, such as Stripe and other scaling fintechs expecting to IPO
Fintech’s revenue share remains small across all verticals. Insurance accounts for less than 1% of fintech penetration. Deposits stand at just 2%. Lending, despite strong activity in personal loans and buy now pay later, accounts for only 3% of global lending revenues.
AI, Tokenization, and Private Credit Tailwinds
Agentic AI where AI powered systems are capable of logic and taking actions independently is a game changer. AI native fintechs have already gobbled up 49% of fintech equity funding yet only represent 23% of the sector.
See: Insights from Jamie Dimon’s 2024 Letter to Shareholders
Blockchain-based on-chain finance is also gaining traction. Tokenization of assets like bonds, private credit, and money market funds is growing at a double-digit rate. While tokenized asset volume remain under $1 trillion today, major institutions like Goldman Sachs and the European Investment Bank are piloting large-scale tokenization programs.
Private credit funds are also becoming essential to fintech lending models. With $1.7 trillion in assets under management, these funds are stepping in where traditional bank funding is constrained. The report estimates a $280 billion untapped opportunity for private credit participation in fintech-originated lending. In 2024 and early 2025, several billion-dollar forward flow deals were announced, including SoFi, Klarna, and Pagaya.
Outlook
Fintech is rebounding and growing faster than traditional banks but has only unlocked 3% of global banking and insurance revenue, so the opportunity is still massive. Fintechs that can deliver sustainable growth, expand into new customer segments, and integrate new technologies like AI and tokenization will be well positioned to capture the next iteration of financial services tech.
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
| | |
|---|---|---|
| | |
Responding to U.S. Financial Risk with Canadian Strength
Innovation Strategy | May 30, 2025
Image: Freepik/jannoon028
Canada Must Lead With Bold Innovation as U.S. Finance Shows Cracks
On May 31, 2025 the Economist ran an article called, "American finance always unique is now uniquely dangerous' unveiling how America’s financial system has evolved into a source of global instability. Private capital giants are creating a new class all to themselves and changing markets, powered by scale, opacity, and political uncertainty. For Canada, it's both a warning and more importantly our strategic moment. Instead of copying the American finance model, Canada can define it's own but strengthening capital independence by building trust-first finance, and accelerating high impact innovation with homegrown channels and tools.
A Fragile and Changing Superpower, Sends a Strong Signal
The article explains how U.S. firms like Apollo, BlackRock, Blackstone, Citadel, and Jane Street have grown at unprecedented rates:
- Three private market giants now manage 2.6 trillion dollars in assets. That is nearly five times more than a decade ago
- Apollo lent $200 billion in 2024 alone. That outpaces new loan growth from major U.S. banks
- Jane Street’s trading revenue in 2024 matched Morgan Stanley’s
These firms operate at speed and scale, are highly interconnected and deeply exposed to volatility. They are providing the capital that fuels the economy, but are also increasing systemic risk. The Economist article points out that in the next crisis, investors may just wake up to a financial system they no longer recognize. Instead of looking at what this expressly means for America, let's turn our focus to what it means for Canada.
Canada’s Strategic Opportunity
Instead of emulating what's unfolding in U.S. financial markets with a dose of more regulation, Canada can lead by building a financial model that is more open, independent, and focused on real impact and outcomes. Five areas of focus stand out:
1. Mobilize Domestic Capital with Purpose
Canada already has strong public institutions that support innovation. BDC, the Strategic Innovation Fund, NRC IRAP, and superclusters like DIGITAL are doing important work. But from seeing how the innovation economy operates first hand for years, these efforts often move in parallel, not in sync, so capital doesn't always reach the ventures that it should.
See: How Fintechs Are Unlocking Value in Private Markets
Canada needs a unified capital deployment strategy that links public funds, pension capital, credit unions, and private investors to the frontier innovations, such as AI, advanced fintech, clean energy, quantum computing, and digital infrastructure. What often seems missing is not just the capital or the infrastructure but national coordination, faster decision making, and larger bold scale.
New tools are needed, such as public-private innovation funds, industry specific capital acceleration platforms, and patient capital vehicles too that are designed to support mid to longer term commercial growth. Instead of launching more pilots, Canada must focus on coast to coast deployment frameworks and national collaboration that get more capital into the hands productive Canadian founders building the future.
2. Build Trust-Based Capital Markets
Trust and transparency are two o f Canada’s greatest financial strengths but it only really matters when the rules are clear, the channels and processes are coordinated, and the government supports the program, then investors understand and are more open to participating.
Canada’s experience with equity crowdfunding is a good example of what happens when the above does not happen. Despite strong public and sector interest, fragmented provincial rules were rolled out, delaying adoption and making it difficult for platforms to operate nationally. Costs and confusion rose, and participation stalled. Even after the rules were unified under National Instrument 45-110 in 2021, much of the early momentum was lost, and it took years of slower growth to finally get wind in the sails and establish new milestones (a testament to a few dedicated and innovative entrepreneurs).
Even the best ideas need clear frameworks and national coordination to encourage public trust and participation. Everyday investors sit on the sidelines when the process is confusing or inconsistent.
See: UK Launches PISCES to Modernize Capital Markets
This same risk applies to newer models like tokenized assets, which have the potential to bring more transparency and better tracking to private markets. These tools only work if they are supported by smart, unified policy frameworks that offer investors clarity and confidence.
Canada does not need more regulation. It needs simpler, better aligned systems that connect investors and innovators in a way that builds confidence at every level.
3. Focus Innovation on Real World Impact
Canada should direct innovation capital to sectors that solve urgent national challenges. This includes enabling fintech to scale small business lending, improve insurance access, close affordable housing gaps, support clean energy transitions, and improve public service delivery by way of examples. The goal is not just economic return but national capacity building. Growth capital should help deliver long term social and economic value in Canada.
Achieving this means aligning investment programs, public procurement, and partnership models with outcomes that matter to Canadians. It also helps ensure that successful Canadian innovations are commercialized and scaled at home, not forced abroad due to lack of local support.
4. Build Sovereign Digital Infrastructure
For innovation to scale safely and securely, Canada must invest in its own digital foundations. This includes national infrastructure for real time rails and modern payments, open banking/finance, digital identity, and interoperable data access. These systems are strategic. As global finance becomes more centralized and politicized, Canada needs open, Canadian-controlled infrastructure that supports innovation without dependency on foreign platforms or proprietary systems.
See: CSA Expands LIFE Exemption to Boost Public Capital Raising
With the right digital infrastructure strategy in place, Canadian fintech and digital companies can grow on their own terms, compete globally, and deliver public value with greater trust and resilience.
5. Stay Open and Independent
Canada’s financial system should remain open to global capital but it shouldn't be overly dependent or reliant on any one market or political cycle. Diversifying capital sources, building a Canada-first tech capacity, and expanding international partnerships will help domestic innovators can grow on Canadian terms. Strategic independence is a competitive advantage.
Why It Matters
The U.S. financial system is evolving quickly and funding innovation at scale in new ways, with new risks creating instability.
See: Larry Fink’s 2025 Fintech Vision for Capital Markets
Canada should not be overly reliant on the U.S. for capital. It should focus on building a domestic model that backs Canadian innovators with capital, trust, strategic focus, and a clear national purpose. It is time to stop chasing someone else’s model and start shaping our own.
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
| | |
|---|---|---|
| | |
