44th Parl. 1st Sess.
April 5, 2022 10:00AM
Madam Speaker, that is an odd question. Regular currency can be used to conduct illegal activities as well. The challenge that the Toronto police outlined in that example is that the framework that might be used to detect or prevent that in this emerging space is something that is worthy of discussion and the federal government, as I have outlined in this bill, likely has a convening role in that regard.
What I worry about is that the industry itself is becoming polarized, as per that question. I would like to see the industry not be labelled bad or good, but that we talk about how we put a policy framework in place that both encourages growth and also safeguards those who are working in the space and those who are consumers.
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Madam Speaker, I am thankful for the opportunity to speak today on this important private member's bill. I want to thank my colleague across the aisle, the member for Calgary Nose Hill, for bringing the bill to the House of Commons.
How Canadians use money and make payments is changing, thanks to the emergence of new digital technology. Bill C-249 seeks to understand the benefits of cryptocurrencies and these new technologies. I commend the member opposite for inspiring discussion on this emerging economic sector. This is an important debate to be had.
I first want to highlight the benefits that cryptocurrency has on Canada's economic growth and the future of money in our country.
Billions of dollars of wealth has been created in the cryptocurrency space. Companies are getting on board. Walmart, Reebok and IBM have implemented crypto and blockchain solutions to maintain the transparency and integrity of their supply chains. Internationally, cryptocurrency is a useful tool. After the illegal invasion of Ukraine by Russia, the Ukrainian government pivoted to accept donations of cryptocurrency to fund its military defence and humanitarian aid. They raised over $100 million in support.
Even residents in my riding use cryptocurrency for personal investment opportunities, and I am sure the same can be said for constituents in ridings across our country. It is a popular and growing investment. There are undeniable benefits to cryptocurrency, and the hype to invest is certainly growing. However, the sector does remain under-regulated.
Governments around the world have their work cut out for them to craft legislation and regulate this new technology. Bills like Bill C-249 make important contributions to the debate on how to regulate cryptocurrency. However, I am concerned that it is narrow in scope. While it certainly highlights the benefits of cryptocurrency, I am concerned that it does not necessarily address the risks involved in the cryptoasset sector. Specifically, it does not address the potential vulnerability and financial instability inherent within the cryptoasset industry. These risks, vulnerabilities and instabilities need to be accounted for as we move forward.
As we transition into a digital world, governments must ensure that cryptoassets have proper oversight. Things like cybersecurity provisions must be established for these sectors. Simply, as cryptocurrencies rise in popularity, Canada needs the proper regulatory infrastructure in place to guide, shape and inevitably regulate the growth. Without these safeguards, we put the safety and security of Canadians at risk.
Of utmost concern to me is that we cannot overlook the dark elements that can be a consequence of the unregulated growth of cryptoassets. Around the world, people in the black market are trying to legitimize their wealth by venturing into the crypto space. This illegal and unregulated activity has posed unintended, or perhaps intended, consequences to economies and democracies around the world.
Over the last month, we have seen the Russian oligarchs use cryptoassets to circumvent western economic sanctions and enable the illegal invasion of Ukraine. This allows Russian oligarchs to preserve their wealth amidst the Russian economic crash. It is undermining the international community's economic sanctions and, most importantly, it is enabling the perpetuation of the atrocities that Russia has been committing against Ukraine.
Closer to home, there is also evidence of the use of cryptoassets in illegal activity as well. Just last month, cryptocurrency was identified as enabling the illegal occupations and blockades here in Ottawa, Windsor and Coutts. Digital currencies allowed protesters to receive global donations without any obstruction or regulation. The freedom convoy's own cryptotoken was designed in such a way as to make it difficult for our law enforcement to connect the individual donors to the actual funds, and this is an evolving problem.
Without proper regulation, the presence of cryptocurrency and its illegal activities will continue. Digital currencies undoubtedly appeal to people looking to evade the scrutiny of law enforcement. They are decentralized, which makes it difficult for government to know what is happening. To this point, I reference Matthew Burgoyne, a leading Canadian digital currency lawyer. He stated that, when faced with scrutiny, “crypto can simply be transferred to another wallet address...and it can continue to be transferred in an effort to obscure the original source, or in an effort to remove the funds as much as possible from the wallet that was frozen.”
As digital currency moves from wallet to wallet, it gets harder to track by law enforcement. Without proper regulation at the federal, provincial and territorial levels, cryptocurrency could become a vehicle for abusive transactions, facilitating money laundering, terrorist financing, criminal activity and tax evasion. Transactions involving cryptoassets are also vulnerable to fraud. There is currently inadequate investor and consumer protection for these activities.
The safety and security of Canadians' financial activities are of course always of central concern to our government. Therefore, as we move forward and we craft policy and cryptocurrency legislation, our legislation must ensure that we adequately address these risks. It cannot simply focus on promoting unbridled growth of the cryptoasset. I fear that this is what we would do with the current version of Bill C-249. Our policies must also clearly delineate the shared jurisdictions of this file. Under our constitutional conventions, the federal government must consult with the provinces and their securities regulators on possible regulations to cryptocurrencies. Currently, I do not believe that this bill would do that.
In addition, international institutions and partners also play a key role in our policymaking. Cryptoassets are a transnational asset. Regulating them requires co-operation among countries. We should ensure that international experts from other jurisdictions are included in our policy-making as we move forward.
We must understand the risks of digital currencies just as much as we understand and promote the benefits of them. Cryptocurrencies have numerous benefits locally, federally and internationally. There is no doubt of that. However, without thorough regulations being implemented, these benefits may be outweighed by the risks. There are real conversations that need to be had as citizens, as members of Parliament and as governments, on what the future of money is going to look like. Those conversations must happen sooner rather than later as more and more Canadians invest in cryptocurrency.
Although I do not believe that in its current state this bill adequately addresses those risks, I thank the member for Calgary Nose Hill for bringing this important discussion forward and being open to how it evolves as it moves through the House.
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Madam Speaker, as I stood up, someone heckled, “Explain Bitcoin.” I can tell members that as much as I would like to think that I have a fairly decent understanding of money supply and how that works, when it comes to cryptocurrency, there is a learning curve that is still required on my part to be able to articulate it in the fashion in which members opposite would like to hear.
However, I can tell members that it is something that is of great concern for all Canadians. The impact it is having in society, not only here in Canada but worldwide, is quite significant, and I think there is a keen interest from a number of stakeholders, whether governments, financial institutions, consumers or producers, in regard to what cryptocurrency is, how it continues to evolve and what impact it is going to have on modern-day society.
As has been pointed out by members on all sides of the House, there are probably more questions regarding the whole concept, which I understand has now been around for over a decade in one form or another, than there are actual answers, so I do believe that we need to see more work done on this particular file.
When I went to university, I had a very basic study of some economic policies, which I enjoyed, and one does get an appreciation of what money supply is. When the member opposite was waving a twenty-dollar bill from his seat as a prop or whatever one might want to call it, the cash that we see in our society is a fraction of the money supply. I think that what we have witnessed over the last many years is different forms of currency coming through in order to facilitate the purchasing and selling of product, whether it is a service or a widget. However, we all know, for example, that at one point in time it would have been through the barter system and, quite frankly, there is, to a certain degree, some people who participate in the barter system. I say that, because at the end of the day, much like currency, whether it is the Canadian or U.S. dollar, it is always going to be there in some form or another, and I feel fairly confident of that.
When we hear about cryptocurrency and the manner in which it is expanding, it is quite significant, and I will expand on that point when the debate comes up next.
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