How Mark Carney’s Anti-Bitcoin Stance Will Impact Canada’s Crypto Market

Mark Carney is now the Prime Minister of Canada after leading the Liberals to a rare fourth-term victory, beating the Conservative leader Pierre Poilievre, who was famously pro-crypto.

Going forward, Carney’s stance on digital assets will shape the country’s crypto market. As a former central banker, he has been vocal about financial stability and regulation.

Although not a pro-crypto advocate, he has sometimes remained neutral about the industry while often calling for strict regulation. His leadership is expected to bring tighter oversight, new policies, and possible changes for crypto businesses and investors.

Push for a Central Bank Digital Currency (CBDC)

The concept of a CBDC has always been the biggest enemy of the crypto industry. A CBDC completely overthrows the inherent rational of cryptocurrencies, which is decentralization.

Carney has supported the idea of a government-backed digital currency. He believes that CBDCs could offer a secure and efficient alternative to private cryptocurrencies. When he was the Governor of the Bank of England, he suggested that a CBDC could improve financial inclusion and payments. The new PM also previously warned that stablecoins issued by private companies could threaten financial stability.

With Carney as Prime Minister, Canada may accelerate its work on a digital Canadian dollar. The Bank of Canada has already explored the idea, but Carney’s leadership could push it further.

If a CBDC launches, it would give Canadians a digital currency backed by the government while reducing reliance on private crypto assets.

Skepticism toward Bitcoin

Carney has repeatedly criticized Bitcoin. He argues that it fails as a currency because of its volatility and limited real-world use. In past statements, he has called Bitcoin a speculative asset that does not work as a store of value or medium of exchange. He has also pointed out concerns about crypto’s use in illicit transactions.

“It is not a store of value because it is all over the map. Nobody uses it as a medium of exchange,” Carney said of Bitcoin in 2018.

He has acknowledged that blockchain technology has useful applications, but he does not see Bitcoin or other decentralized cryptocurrencies as viable alternatives to traditional money.

Under his leadership, Canada is unlikely to embrace Bitcoin as legal tender or promote its adoption at a national level.

Stronger regulations for the crypto market

Carney has called for stricter rules to regulate cryptocurrencies. He believes crypto businesses should follow the same financial laws as banks and stock exchanges. He has pushed for strong anti-money laundering measures and has said that crypto exchanges must have strict customer verification policies.

His government is expected to enforce tougher compliance requirements on crypto trading platforms. Canadian exchanges may need to register with financial regulators, maintain transparent operations, and protect customer funds.

This could make it harder for unregulated platforms to operate in Canada. Crypto businesses will face more scrutiny, making compliance a priority for those wanting to stay in the market.

Impact on crypto exchanges and institutional adoption

In the past few months, Canada has shown notable pro-crypto developments that signaled increasing interest from institutional investors. For instance, BlackRock recently launched its Bitcoin ETF in Canada.

Conservative candidate Pierre Poilievre had promised to make Canada “the Blockchain capital of the world” if he won.

He had previously stated: “A Poilievre government would welcome this new, decentralized, bottom-up economy and allow people to take control of their money from bankers and politicians. It would expand choice and lower the costs of financial products, and create thousands of jobs for engineers, programmers, coders and other entrepreneurs.”

However, policies under the victorious Carney will now reshape how crypto operates in Canada. Crypto platforms will need to meet strict regulations similar to traditional financial institutions. This will mean increased costs for exchanges, stricter rules for listing tokens, and tighter controls on leverage and trading options.

Institutional investors may also be cautious about crypto under Carney’s leadership. Canadian banks and pension funds have already taken a careful approach to digital assets. His emphasis on stability and regulation may discourage them from making large investments in crypto. Instead, institutions might focus on regulated digital asset projects, such as tokenized securities or government-backed digital currencies.

Final thoughts

Mark Carney’s leadership will likely bring significant changes to Canada’s crypto market. A government-backed CBDC may take priority over private digital assets. Crypto businesses will have to follow stricter regulations. Institutions may move away from speculative crypto investments and look for regulated digital finance opportunities. Canada’s crypto market might be set to become more controlled, with a focus on security and compliance over rapid innovation.