Canada Moves to Impose Blanket Ban on Political Donations in Crypto Assets

The Canadian government has introduced legislation to block political fundraising via crypto assets (cryptocurrencies) outright. The move comes amid concerns that the anonymity of crypto assets undermines transparency in political financing and could serve as a channel for illicit inflows of foreign funds.

On the 26th (local time), the federal government of Canada submitted to the House of Commons the “Fair Elections Act (Bill C-25),” centered on banning political donations made using crypto assets such as Bitcoin (BTC), as well as money orders and prepaid payment instruments. The bill would apply broadly across the political system, including registered parties, candidates, and third parties that conduct election advertising.

Canada has previously allowed crypto assets since 2019 by classifying them as “non-monetary contributions,” similar to real estate. However, following repeated warnings from the Chief Electoral Officer (CEO) that the highly anonymous nature of crypto assets makes it fundamentally difficult to identify donors, the policy stance has shifted from regulation to prohibition. The decision is also seen as having been influenced by the UK government’s recent announcement of a ban on political donations in crypto assets aimed at blocking foreign funding.

At present, crypto-asset donations within Canadian politics are virtually nonexistent. During last year’s general election, none of the major parties openly accepted crypto-asset donations. That is because such donations are not eligible for tax credits, and donors must disclose their real names for contributions of $200 or more—frictions that have served as barriers to entry.

If the bill passes, recipients who received donations via prohibited means must return or dispose of them within 30 days. Violations would result in administrative fines of up to twice the value of the donation, and corporations could additionally face fines of $100,000.