As Canada’s financial landscape evolves, so must our approach to qualified investments within tax-advantaged savings plans like RRSPs and TFSAs. At Shakepay, we believe it’s time for Canada to allow Canadians to invest directly in Bitcoin within their qualified investment accounts, similar to the approach taken by the United States. Here’s why.
Shakepay is a Montreal-based fintech company that enables Canadians to buy, earn, and interact with bitcoin. Serving over one million Canadians, we believe in a secure, transparent, and forward-thinking financial system that empowers individuals to build wealth on their own terms.
Our commitment to bitcoin doesn’t stop with retail consumers. Shakepay is expanding its presence with High Net Worth Individuals, Corporates and Institutions by soon offering an over-the-counter (OTC) trading desk along with an expanded suite of products to meet the growing demands of business accounts. This initiative aligns with our broader strategy to integrate bitcoin into Canada’s financial framework, advocating for its inclusion as a qualified investment in registered accounts such as RRSPs and TFSAs. By doing so, we are reinforcing our belief that bitcoin should be a core component of long-term financial planning for all Canadians.
What are Qualified Investments?
Qualified investments are financial assets eligible to be held within tax-advantaged accounts like RRSPs and TFSAs, which offer significant tax benefits to encourage long-term savings. Currently, these accounts can hold assets such as mutual funds, stocks, bonds, and ETFs. Including Bitcoin as a direct investment would expand the options available to Canadians, offering additional opportunities for diversification and growth.
Differentiating Bitcoin from Other Cryptocurrencies
Shakepay wants to help Canadians build wealth and we believe that bitcoin is one of the best ways to achieve this. It is therefore important to recognize that not all crypto assets are created equal. Bitcoin carries a significantly different risk profile compared to other cryptocurrencies. Unlike most digital assets that depend on centralized parties and have unlimited supplies, Bitcoin operates on a peer-to-peer network without the need for a centralized authority and has a capped supply of 21 million. This scarcity is a core component of Bitcoin’s value, making it a reliable long-term investment rather than a speculative asset.
Canada has already made strides in acknowledging Bitcoin’s potential. Bitcoin ETFs, for instance, have seen substantial adoption. With over $3 billion in assets under management across several funds since their launch in 2021, the growth of Bitcoin ETFs in Canada has shown there is a strong demand from investors to sell Bitcoin and get exposure to this asset. Through these ETFs investors are eligible for tax benefits within RRSPs and TFSAs, indicating a clear precedent for Bitcoin’s inclusion as an asset class. However, it is now time to take the next step and allow direct investment in Bitcoin.
Bitcoin: A Mature and Secure Asset
Bitcoin has reached significant levels of maturity, with trading platforms implementing rigorous security protocols and compliance measures that align with traditional market standards. With its high daily trading volumes and global presence, Bitcoin’s liquidity is comparable to traditional assets like stocks and bonds, making it a suitable candidate for inclusion in qualified accounts.
How Direct Investment Differs from ETFs
Directly investing in Bitcoin within qualified accounts is distinct from holding Bitcoin ETFs. ETFs offer indirect exposure by holding Bitcoin on behalf of investors and tracking its price. In contrast, direct investment means owning actual Bitcoin, providing more control, potentially lower fees, and eliminating counterparty risks associated with ETF providers. It also allows investors to benefit from Bitcoin’s unique characteristics, such as its scarcity and decentralized nature.
Government’s Role in Investment Choices
The federal government should not mandate what constitutes a safe investment for Canadians. While it is essential to protect investors and ensure fair market practices, deciding which assets belong in individual portfolios is beyond its scope.
Currently, Canadians are free to invest in high-risk assets like small-cap stocks, venture capital funds, and speculative real estate projects within their qualified investment accounts. As long as appropriate disclosures, criteria, and consumer safety standards are met, Bitcoin should be treated no differently.
Success of Direct Asset Exposure in the U.S.
The success of direct Bitcoin investment in the United States provides a compelling model for Canada. U.S. retirement plans can include cryptocurrency assets in their core investment options or offer self-directed windows for choosing crypto investments within 401(k) plans.
This approach has seen strong uptake, reflecting growing confidence and demand among investors. Canada can unlock similar opportunities by adopting this model, offering Canadians more choice and growth potential in their portfolios.
The Path Forward
Allowing direct Bitcoin investment in RRSPs and TFSAs is a natural progression for Canada’s financial ecosystem. It acknowledges Bitcoin’s maturity and stability, comparable to traditional assets, while providing Canadians with more opportunities for diversification and growth.
At Shakepay, we are committed to advocating for policies that foster innovation while ensuring consumer protection. Including Bitcoin as a qualified investment is a critical step towards modernizing our financial services and maintaining Canada’s leadership in financial innovation.
Eric Richmond, General Counsel and Head of Business Development at Shakepay.
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