2023 Fintech and Financing Conference & Expo

Making Beaver, Bank and Bitcoin in Canada

By Tristram Waye for Bitvo | Oct 27, 2022

Canadian coin money - Making Beaver, Bank and Bitcoin in CanadaCanada may be a young country, but we have more than 400 years of monetary value discovery under our belts.

  • Money in Canada:  Part of that history involves wampum, beaver pelts, and moose hides. It involves wheat and coins referred to as specie. There are several episodes of card money. And all of this got me thinking about the crypto experience so far.   Frankly, it’s been a wild ride. And when you look back two, three, four hundred years, you see that wild rides are part of the package. And what you discover about money in Canada is that it’s something more than a simple piece of paper.

See:  IMF Magazine: Money Revolution in the Age of Crypto and CBDCs

  • Early Canada had several monetary eras
    • Our story here starts with the arrival of the French in 1608. So the first period runs from 1608 to1760. The French period had almost everything, including pelts, skins, coins, card money, shells called wampum, and even wheat. The French period corresponds with numerous wars and John Law’s infamous Mississippi Bubble.
    • In 1760, the British took over, and that period ran until the British North America Act of 1867. This period has coins until the first bank in 1817. Then banks start issuing their own notes until the BNA Act.
    • In 1841, Upper and Lower Canada were combined into the Province of Canada. And 1842 was when a legal value for British, American, and Spanish coins in the Province was determined.
    • In the 1850s, a decimalized Canadian currency existed in parallel with British coins.  Then as of 1858, Canadian dollars were priced in relation to British gold sovereigns. US, British, and Canadian coins were all legal tender, but all others were excluded.
  • Make Beaver: Economic historian Adam Shortt described the role of Beaver pelts in his series on The Early History of Canadian Banking, published by the Canadian Bankers Association in 1898.
    • In one record, “1 Made Beaver” (1MB), or one adult male skin, could be exchanged for a variety of goods. For example,  1MB = 1 1/2 pounds of gun-powder, 1MB = 2 hatchets, 1MB = 1 blanket , 1MB = 2 shirts etc.  Values of 1MB varied based on factors including seasonality, demand, and supply.

See:  Matt Levine: The Crypto Story

  • You could issue a promise to pay in any form: When the British took over in 1760, there was no more paper money, at least initially. The only money that existed in the precursor to Canada was specie, as they referred to it.
    • And British coins were used as a standard, but again, all sorts of coins existed from other nations. These were freely exchanged between individuals.
    • B.E Walker, writing A History of Banking in Canada in 1899, stated that “In Canada we began with the very simple and obvious theory that, without the existence of laws to the contrary, an individual had the right to issue his promise to pay in any form, the only deterrent to the exercise of such a luxury being the difficulty of inducing anyone to accept it in payment.”
  • First Canadian banks:  The Bank of Montreal came on the scene in 1817. The founding name and location were natural, given the long-standing role of Montreal as a fur trading hub. The trade in furs tied together a relationship from Montreal down to Albany, New York. This relationship was said to have had a direct influence on early Canadian banking rules.
  • Canada on/off the gold standard: Canada’s currency was officially started at the beginning of 1858. The Canadian dollar was set at 15/73 of a British gold sovereign. This was changed in 1910 to one Canadian dollar being priced in fine gold, or the gold equivalent of the US dollar.  The Canadian dollar was taken off the gold standard at the start of World War I until 1926. After a brief period back on the standard, it was removed for good in 1929.

See:  Alberta, The untold history of innovation from Canada’s badlands – Part 1

  • From Beaver to Bitcoin: When you read the writing from the 1890s, it has a sense of clarity and matter-of-fact to it. You get the idea that money is malleable, contextual, situational, and evolving. It has an organic quality to it. You can see how different solutions can coexist simultaneously. And this is an important thing to consider right now. Because the financial system has something brewing. Now we have bitcoin and lots of other crypto options. And with crypto has come a belief that the dollar will experience another evolution and be replaced.  But what if the future is more subtle than that?

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NCFA Jan 2018 resize - Making Beaver, Bank and Bitcoin in CanadaThe 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, 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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