In 2023, the ground began to shift beneath Canada’s digital asset sector – the fast-evolving space that includes cryptocurrencies, blockchain technologies, and other tokenized financial instruments. First came Coinbase, one of the world’s largest cryptocurrency exchanges, announcing it was reassessing its Canadian operations due to regulatory uncertainty. Then the U.S. cryptocurrency exchange, Kraken followed, restricting services for Canadian users over similar concerns.

At first glance, the withdrawals seemed puzzling. Canada has long been recognized for its stable, trusted financial system. But beneath that surface lies a growing problem: a lack of clarity and coordination in the country’s approach to digital assets.

Recognizing the significance of the situation, Hubert Pun, Ivey Professor of Management Science, Amin Mazhari, PhD ’22, and the Lawrence National Centre for Policy and Management stepped in with a warning – and a way forward. Their new policy brief outlines five strategic recommendations designed to help Canada not only retain its most innovative players but also take its place as a global leader in the digital economy.

By the end of 2025, Canada’s digital asset economy is projected to reach $913 million USD – a figure that is only expected to climb as adoption expands across industries like finance, energy, and logistics. And this momentum isn’t just driven by speculation.

“Digital assets are increasingly becoming mainstream and used for everyday payments – from fast food to luxury goods,” said Pun.

Around the world, the shift is unmistakable. Every day, companies like PayPal, Whole Foods, Starbucks – and even luxury retailers such as Gucci, Tag Heuer, and Balenciaga – are enabling customers to pay with cryptocurrencies like Bitcoin, Ethereum, and even Dogecoin.

Taking notice, governments around the world aren’t waiting on the sidelines – they’re racing to lead. The United Kingdom is launching a national framework to regulate digital assets from the ground up. Singapore and Hong Kong are welcoming blockchain startups with open arms, offering regulatory sandboxes and clear paths to scale. Even in the U.S., lawmakers and regulators are actively shaping the rules through a mix of enforcement and legislation.

Why the urgency? The economic upside is clear.

“In Texas alone, blockchain mining activity has been credited with creating 31,000 jobs and contributing $4.1 billion to gross product in 2025,” Pun noted.

Globally, digital assets are increasingly seen as engines of innovation, growth, and competitiveness. So, the question remains: why isn’t Canada moving with the same ambition?

It may surprise some, but Canada has a legacy of firsts in digital asset innovation. It is the birthplace of Ethereum – one of the most transformative blockchain platforms globally – and was the first country to approve a Bitcoin exchange-traded fund (ETF).  At one point, Canada was setting the pace.

But that momentum has slowed. And it’s not due to a lack of talent or infrastructure. The real issue is fragmentation.

Oversight of digital assets in Canada is scattered across multiple federal and provincial bodies, including the Canadian Securities Administrators (CSA), the Investment Industry Regulatory Organization of Canada (IIROC), FINTRAC, and the Bank of Canada. These institutions often operate in parallel rather than in coordination, leaving startups and investors to navigate a maze of conflicting rules and unclear expectations.

“Because of this patchwork,” said Pun, “startups are struggling to navigate overlapping mandates, while established players are scaling back due to prolonged uncertainty. This red tape is stifling our innovation and limiting our potential for value creation.”

So how can Canada turn the tide and reclaim its leadership in digital finance? In their brief, Pun and team outline a clear path forward, with five tangible recommendations.

1. Build a unified regulatory framework

Canada needs a unified, forward-looking framework that sets the vision for digital assets. To do so, it must harmonize policies across the CRA, CSA, FINTRAC, and provinces to build an innovation-friendly legal framework.

2. Accelerate innovation and talent

Canada must invest in talent as well as technology. Fast-tracking visas, targeted tax incentives, and stronger university-industry partnerships can drive growth. Additionally, expanding regulatory sandboxes would let companies test innovations safely, accelerating adoption while mitigating risk.

3. Ensure access and financial inclusion

Digital finance should serve all Canadians, and not just early adopters. Canada should reconsider a Central Bank Digital Currency (CBDC) – a government-backed digital form of the national currency – with a focus on financial inclusion and mobile-first tools for underserved communities.

4. Modernize stablecoin and tax policy

Canada should support a homegrown, dollar-backed stablecoin – a type of digital currency designed to maintain a stable value by being pegged to a real-world asset, such as the Canadian dollar. But it shouldn’t be seen only as a financial asset. A well-designed stablecoin could serve as a useful tool for everyday payments, public services, and trade.

Modernizing tax reporting, offering investor guidance, and enabling crypto in RRSPs and TFSAs would further boost compliance and broaden access.

5. Align digital growth with clean energy

Canada’s clean energy, especially in Quebec and B.C., gives it a natural advantage in building sustainable blockchain infrastructure. With the right incentives, blockchain can also support carbon tracking, ESG reporting, and supply chain transparency. Prioritizing investment in energy-rich regions can turn this environmental strength into digital leadership.

For Pun and his team, the timing of these recommendations is no coincidence, it’s a response to a moment that demands clarity and courage. As digital finance surges ahead globally, Canada finds itself at a crossroads, grappling with rising economic headwinds.

“Canada is facing a convergence of economic challenges – from declining innovation rankings and growing U.S. trade pressure to persistent issues in housing, infrastructure, and talent retention,” Pun explained. “These aren’t problems we can solve with half-measures. They require a bold, forward-looking economic strategy – one that puts digital transformation at the centre.”

And the implications extend far beyond economic recovery. A well-regulated digital asset ecosystem could position Canada not just as a participant in the global digital economy, but as a rule-shaper at the international table.

The bottom line? The window is open, and what Canada does next will determine whether it watches the future unfold – or helps design it.

Download the full report, Perspective Policy Brief - Canada’s Digital Asset Opportunity: Shaping a Strategic Path to Global Leadership by Pun, Mazhari, and the Lawrence National Centre for Policy and Management, available now on the Lawrence Centre’s website.