Conservative leadership candidate Pierre Poilievre said Monday a government led by him would do more to normalize cryptocurrencies like bitcoin and ethereum in Canada to “decentralize” the economy and reduce the influence of central bankers.
Since bitcoin’s advent in 2013, a number of right-leaning and libertarian-minded investors have championed cryptocurrency — a financial instrument that is largely unregulated in the Western world — as a way to reduce government control over money because the supply of cryptocurrency tokens is not set by an authority like the Bank of Canada or the US Federal Reserve.
With its supply limited to just 21 million tokens, bitcoin boosters insist cryptocurrency is a hedge against inflation.
Speaking at a shawarma shop in London, Ont. that accepts bitcoin as payment, Poilievre said that over the course of the COVID-19 crisis the Bank of Canada created “$400 billion in cash out of thin air” through its policy of quantitative easing — a development he blames for inflation hitting a 30- year high and housing prices reaching all-time record levels.
As it did during the Great Recession, the central bank has embraced quantitative easing over the past two years to boost lending and spending during a time of financial panic.
As the party’s finance critic, Poilievre has railed against the policy because he, like some conservative-minded economists, sees the government’s ability to print money — which can devalue existing dollars — as a form of taxation.
“Government is ruining the Canadian dollar, so Canadians should have the freedom to use other money, such as bitcoin,” Poilievre said Monday.
“Canada needs less financial control for politicians and bankers and more financial freedom for the people. That includes freedom to own and use crypto, tokens, smart contracts and decentralized finance.”
Poilievre’s description of cryptocurrencies is similar to what conservatives in another era said about the gold standard — a policy of fixing the value of a country’s currency directly to gold to limit the money supply. The gold standard was abandoned by all major economies in the twentieth century because it proved to be too volatile and it restricted a government’s ability to respond to economic crises.
Poilievre said that, if he’s elected prime minister, he’ll “keep crypto legal and reject a China-style crackdown.” The Chinese government has banned cryptocurrencies because it says bitcoin and products like it could destabilize existing financial systems and fuel fraud and money laundering.
Securities regulation falls under provincial jurisdiction. Poilievre said he’d work with the provinces and territories to eliminate a “cobweb of contradictory rules” that govern crypto and blockchain — the system which records bitcoin and other cryptocurrency transactions.
Poilievre said he also wants crypto to be treated like gold and other commodities for taxation purposes.
Poilievre said he wants to foster “a new, decentralized, bottom-up economy” by creating a more permissive regulatory environment.
“Choice and competition can give Canadians better money and financial products. Not only that, but it can also let Canadians opt-out of inflation with the ability to opt-in to crypto currencies. It’s time for Canadians to take back control of their money and their lives by making Canada the hardest country on earth,” Poilievre said.
The value of bitcoin has increased dramatically over the past two years of the pandemic as individual investors poured money into it and other cryptocurrencies.
But bitcoin has had a volatile run in recent months as central banks have increased interest rates to tackle pandemic-driven inflation, making speculative investments less attractive. The price of bitcoin has dropped some 30 per cent since its November 2021 high.
Bitcoin has also been criticized by some large investors like Warren Buffett, the billionaire chairman of Berkshire Hathaway, and his business partner, Charlie Munger. They maintain these sorts of financial tools have the potential to collapse, wiping out tens of billions of dollars in wealth for casual buyers.
Crypto is a ‘delusion,’ says Buffett
Buffett and Munger argue bitcoin’s value is purely the product of speculation.
“Bitcoin is ingenious but it has no unique value at all. It doesn’t produce anything. You can stare at it all day and no little bitcoins come out. It’s a delusion, basically,” Buffett said in a 2019 interview with CNBC, adding it’s like “rat poison” for investors.
“What you hope is someone else comes around and pays you more money later on, but then that person has the problem. In terms of value, it’s zero.”
The shadowy nature of the currency is also source of a concern for some.
“I don’t welcome a currency that’s so useful to kidnappers and extortionists,” Munger said last year. “The whole damn development is disgusting and contrary to the interests of civilization.”
Poilievre’s fondness for bitcoin is well documented. Last fall, Poilievre said he disclosed his cryptocurrency holdings to the federal ethics commissioner.
While anti-vaccine mandate protesters associated with the so-called “Freedom Convoy” were in downtown Ottawa earlier this year, the Toronto Star reported Poilievre was having “frequent” conversations with Greg Foss, a major Canadian bitcoin investor who raised hundreds of thousands of dollars in cryptocurrency to fuel the anti-vaccine mandate movement.
In February, Poilievre appeared on a cryptocurrency podcast hosted by a bitcoin trader who has promoted COVID-19 conspiracies and has compared central banking policies to slavery and Nazi Germany.
Poilievre told the show’s host, Robert Breedlove, that he and his wife occasionally watch his cryptocurrency YouTube channel “late into the night.”
“I find it extremely informative and my wife and I have been known to watch YouTube and your channel late into the night once we’ve got the kids to bed,” Poilievre said. “And, I’ve always enjoyed it and I’ve learned a lot about bitcoin and other monetary issues from listening to you.”