Tuesday, March 29, 2022
Today, we launched the Canadian Web3 Council, a non-profit trade association founded by industry leaders to work constructively with policymakers and establish Canada as a leader in Web3 technology.
Web3, which includes blockchain and cryptocurrencies, has quickly evolved from a technology used by hobbyists to a global industry currently valued in the trillions of dollars. But beyond its incredible economic potential, it offers new standards of efficiency, transparency, and coordination, which are critical to helping solve some of the greatest challenges facing the digital economy.
Communities around the world already use Web3 technology to coordinate public good initiatives in unprecedented ways, including bridging the digital divide, taking power away from authoritarian regimes, efficiently funding democratically-elected governments to defend themselves, and helping citizens manage financial instability in nations with corrupt governments.
Much like the early days of the Internet, blockchains have unleashed a wave of innovation and creativity for a generation of entrepreneurs. Their inventions include decentralized applications furthering financial inclusion, NFT standards that empower artists to earn a living, and payment systems that enable migrant workers to send payments home instantaneously with almost no cost.
Despite the potential, there are hurdles, and Canada could miss the boat on Web3. Among innovators, the lack of legal clarity stifles their ability to run a business in their home country. Among policymakers, the novelty of Web3 poses a unique challenge to establish policy that balances innovation, consumer protection, and stability. Among the general public and media, many people are still beginning to understand what Web3 is – and isn’t.
We need to work together to build a robust, equitable and sustainable Web3 economy. The stakes are too high to do otherwise. If we fail, Canadians could miss out on participating in the most important innovation in decades, and Canada could fall behind other jurisdictions that have taken steps to harness this innovation.
Our goal is to create an environment to support the growth of this industry in Canada, while ensuring the sector remains accessible and inclusive to all Canadians. Our immediate priority is to share our learnings with the Canadian public and advocate to the government to devise transparent and effective policy solutions.
Canadians play a big role
As usual, Canada continues to punch above its weight and Canadian entrepreneurs have already played a critical role in shaping Web3 around the world. For instance, Canadians have founded many of the most important blockchains, including Ethereum, the second largest blockchain by market capitalization, Cosmos, a decentralized network of independent, scalable, and interoperable blockchains, and Flow, a blockchain designed to be the foundation of Web3 and the open metaverse, supporting consumer-scale decentralized applications. Canadians have also created some of the most important applications and products in Web3, ranging from mainstream NFT platforms like CryptoKitties and NBA Top Shot, to the world’s first spot Bitcoin ETF and other financial products that offer investors direct access to this emerging ecosystem.
But while Canadians have played a key role in building this technology, Canada may not benefit from it. The lack of legal clarity in Canada has pushed Canadian entrepreneurs to move to jurisdictions with friendlier rules. For instance, the European Union has developed a pan-European strategy intended to promote legal certainty, increase funding to startups, support blockchain network interoperability, and develop necessary skills for the industry. On the border of the European Union lies Switzerland, which has become a hub for blockchain innovation due to their favourable policies towards non-profit foundation structures integral to blockchain business models.
And while entrepreneurs in the United States also suffer from some of the same uncertainty as those in Canada, recent trends suggest growing support for the industry among policymakers and the administration, as highlighted by President Biden’s recent Executive Order on the Responsible Development of Digital Assets.
Our country has the opportunity to be a global leader, but we must create a regulatory environment that encourages our innovators to grow their business domestically, enables Canada to shape Web3, and secures the jobs and tax revenue generated by the most important innovation in decades.
To secure Canada’s place, industry and government must work together
And we need to do it now. If we don’t support our pioneering innovators, other countries will drain Canada of our talent and tax revenue, and we will lose any competitive advantage we now possess. As two of our founding members recently told the House of Commons Standing Committee on Finance, now is the time to support Canadian innovation and competition. In fact, our association’s immediate priority is to advocate to the government for the development of a comprehensive national strategy for cryptocurrency and digital assets.
That’s why we are uniting the Canadian Web3 ecosystem. Our members represent a diverse group of Canadian organisations from across the industry, including open-source projects, exchanges, educational organisations, validators, investors, and foundations, who will work together with policymakers and Canadians to advance the future of our digital economy.
Our founding members include Canadian companies like Aquanow, ChainSafe Systems, Dapper Labs, ETHGlobal, Figment, Ledn, Wealthsimple and WonderFi, who have demonstrated a commitment to growing the Web3 ecosystem in Canada with new financial products, blockchain applications, education, and more; projects such as Informal Systems (Cosmos) that are leaders in the development of public blockchain infrastructure; as well as investors like Ether Capital and Axiom Zen.
We want the same things as the Canadian government and our fellow Canadians: a prosperous and inclusive economy with accessible financial opportunities for everyone. Policymakers and industry may not agree on everything, but we have the expertise and tools to find a pathway together that helps all Canadians.
We want to hear from you
In the coming months, we will be reaching out to the Web3 community to ensure the Canadian Web3 Council reflects the diversity of this fast-growing ecosystem. We encourage those in the sector to reach out and be part of shaping the Council’s mission.
We are also incredibly lucky to have the early support of many members of the community who brought everyone together to build this organisation. Particular thanks goes to Jelena Djuric and Connor Spelliscy who co-founded the Canadian Web3 Council and continue to provide their support and industry expertise, and to the Blockchain Association for their invaluable assistance.