We talk to Eric Richmond, Country Director and CEO of Coinbase Canada, about cryptocurrency’s market slump, what Bitcoin’s purpose is, and the basics of stablecoins.
Cryptocurrencies have, generally speaking, not performed well over the past year or so. If you'd bought Ethereum 12 months ago you'd be down around 35%, while you'd be up more than 20% in the S&P 500. Given what's happened there, what's the case now for buying crypto rather than just parking my money in an index fund?
Crypto is a new financial technology, and for many crypto investors, a one-year price comparison isn't the right lens. Some cryptocurrencies can be fluctuating assets, and investors understand that. But zoom out, and the cycles aren’t new. I’ve been in this space a long time and been through several of them as a founder. Historically, each cycle has ended with more retail and institutional adoption than the last, and the lows have trended higher.
Risk is an individual investing decision, but that being said, five million Canadians already own crypto. As long as people understand their own risk appetite, they should be able to access products that fit it.
Finally, digital finance is much broader than one asset. That is the vision for Coinbase’s Everything Exchange: taking what this technology does well – 24/7 availability, instant settlement, global movement – and applying it across financial services.
A step in that direction for us is our upcoming launch of crypto derivatives through Coinbase Financial Markets, a CFTC-regulated entity, with access rolling out to certain permitted Canadian clients in the coming weeks and plans to broaden to more retail clients through Coinbase Canada over time.
In your view, what is Bitcoin for now? Is it a speculative investment? A hedge? A good store of value? A currency? How should people think about it as an asset?
Bitcoin will mean different things to different people. Some hold it as a long-term store of value, some as a way to own something outside the traditional system, and some just as an investment. I won't tell anyone which of those it should be for them. For me, it’s closest to a long-term store of value.
What mattered most to me from day one was the potential for blockchain, the technology underpinning Bitcoin, to make payments faster, markets more efficient, financial services more accessible, and ultimately to expand economic freedom. That’s how I think we should be thinking about crypto.
What are stablecoins, and what is an example use case for a stablecoin?
A stablecoin is a digital currency backed one-to-one with a dollar, that behaves like digital cash and can move more quickly and freely than traditional payment rails.
A great use case for stablecoins is sending money abroad. Canadians currently pay up to 12% and wait days to move money internationally, and one in five sent a remittance just last year. A stablecoin allows for the process in seconds, at a fraction of the cost
The best of this technology is still to come, as tokenized assets, stablecoins, and onchain infrastructure make payments faster, markets more efficient, and financial services more accessible to Canadians.
Coinbase had some positive things to say about the federal government's stablecoin policy, recently enacted as part of Bill C-15. Can you walk us through what changed in that legislation and why Canadians should care?
The new legislation gives consumers and innovators confidence to interact with stablecoins.
For the first time, Canada has a clear, credible federal framework for stablecoins. The Bank of Canada will oversee issuers, who have to hold full reserves, let people redeem at par, and meet governance and security standards. It also lines Canada up with global standards like the U.S. GENIUS Act and Europe's MiCA, so we are coming up to speed with the rest of the G7 on this important piece.
Canadians should care because it means faster, cheaper ways to do everyday things like send money abroad, with the confidence that the money behind a stablecoin is backed with fiat currency. It's a strong foundation to build the future of Canadian digital assets on.
How can Canadians trust that a stablecoins peg to the dollar will hold? Is this addressed by the new regulation?
This is why Canada’s Stablecoin Act is so important. A stablecoin regulated under Canada’s Stablecoin Act will be fully backed by one-to-one cash reserves. For every coin in circulation, there will be fiat currency in reserve that can be redeemed at any time. The reserve and redemption rules are written into law, and the Bank of Canada will supervise the issuers once the regime is fully in force.
I think for many people, even if they want to own crypto, the process of buying and holding it securely is still quite daunting. What are the most important steps people need to take to protect themselves if they're going to start buying crypto assets?
The most important aspects to consider would be:
Use a regulated, trusted platform, overseen and regulated by federal and provincial securities regulators across the country.
Look for transparency and strong disclosure practices. For example, Coinbase is a publicly traded company, so anyone can see the health of the business standing behind the platform.
If choosing to self-custody crypto, understand the risks, benefits, and best practices for keeping your digital wallet safe.
Finally, as with all financial services it is important that you take appropriate steps to protect your funds. You can learn best practices at coinbase.com/security.
What are some underrated use cases for crypto that you wish more people knew about? And what is the most important use case?
The most underrated one is everyday payments and moving money across borders. People assume crypto is only for investing, but stablecoins can make sending money much easier. I see a future where stablecoin enabled payments are the default technology for the 3.6 trillion transactions worldwide every year.
Another is tokenizing assets like stocks. Today markets close at 4pm and a trade takes a day to settle. Tokenization lets them run 24/7, settle instantly, and trade in fractional amounts. I think this could fundamentally change how global markets operate and ultimately allow more people to access financial services.
