Conservative leadership contender Pierre Poilievre said Monday that a government led by him would do more to mainstream cryptocurrencies such as Bitcoin and Ethereum in Canada to “decentralize” the economy and diminish central bankers’ power.
A Hedge Against Inflation
Since bitcoin’s launch in 2009, several right-leaning and libertarian-minded investors have backed it. They view it as a tool to minimize government control over money because the supply of cryptocurrency tokens is not determined by a central bank like the Bank of Canada or the Federal Reserve Bank of the United States. Bitcoin supporters argue that because the supply is limited to just 21 million tokens, cryptocurrency provides a hedge against inflation.
Poilievre, the party’s finance critic, has raged against the scheme. It’s because he, like other conservative economists, considers the government’s authority to issue money, which can devalue current dollars, to be a sort 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.”
Cryptos Should be Treated as Gold
Poilievre’s depiction of cryptos is similar to what conservatives argued about the gold standard in another age — a policy of directly linking the value of a country’s currency to gold to control the money supply. In the twentieth century, all major economies abandoned the gold standard because it proved to be excessively volatile and limited a government’s capacity to respond to economic crises.
If elected, Pierre Poilievre would keep cryptocurrencies legal. He said he would reject a China-style crackdown on digital currencies.
Under provincial jurisdiction, securities regulation falls under the supervision of the provinces. Poilievre said he would work with the regions to eliminate the various conflicting rules governing them in response to the rise of digital currencies, such as bitcoin.
In addition, he said that he also wants crypto to be treated like gold and other commodities for taxation purposes.
Poulievre wants to create a more permissive regulatory environment to create a new, decentralized, bottom-up economy. “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 freest country on earth,” Poilievre said.
Crypto Criticism Still at Large
Individual investors poured money into bitcoin and other cryptocurrencies during the pandemic’s first two years, causing its value to skyrocket.
However, Bitcoin has had a tumultuous recent run as central banks have raised interest rates to combat pandemic-driven inflation, making speculative investments less appealing. Bitcoin’s price has fallen over 30% since its peak in November 2021.
Bitcoin has also been criticized by some of the world’s most influential investors, including Warren Buffett, the billionaire chairman of Berkshire Hathaway, and his business colleague, Charlie Munger. They argue that these financial instruments have the potential to fail, wiping away tens of billions of dollars in value for casual consumers.
According to Buffett and Munger, the value of bitcoin is purely speculative. “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.