- Canada’s Bill C-25 proposes banning crypto donations across parties, candidates, and advertisers.
- Fines can reach twice the donation value after a similar bill failed in January 2025.
- The UK has already imposed a crypto donation ban, and Canada is the latest to join.
Canada has introduced Bill C-25, known as the Strong and Free Elections Act, to ban cryptocurrency donations across its political system. The proposal covers political parties, candidates, electoral associations, and third-party advertisers.
The bill places crypto alongside prepaid cards and money orders, citing difficulty in tracking the source of funds. Authorities argue that crypto transactions make it hard to identify donors, creating a risk to transparency.
Penalties are strict, and violations could result in fines worth twice the value of the donation. Recipients would also be required to return or destroy the funds within 30 days.
This marks Canada’s second attempt. A similar bill, C-65, failed in January 2025 after parliament was dissolved. The new bill is now at the first reading stage.
Why Governments Are Moving to Ban Crypto Donations
The core issue is traceability. Crypto transactions can hide the identity of donors, especially when routed through multiple wallets or offshore platforms.
This creates a gap in election funding rules, where traditional systems require clear identity checks.
Governments see this as a direct risk of foreign interference. Funds from outside the country can enter political campaigns without clear tracking.
This creates a simple chain of weak identity checks that lead to hidden funding, which increases the risk of influence on elections. As a result, countries are shifting from regulation to outright bans.
UK Action Triggers Global Response
Canada’s move comes one day after the United Kingdom imposed a ban on crypto political donations.
The UK government introduced an emergency moratorium under Prime Minister Keir Starmer, citing risks of illicit finance and foreign influence. The decision followed pressure from lawmakers and an independent review that flagged crypto as a high-risk channel.
Authorities highlighted that foreign actors could use crypto to move funds into political systems undetected. The UK also capped overseas political donations at £100,000 per year.
Both Canada and the UK call these moves defensive, not reactive. There is no large-scale abuse reported, but the risk level is considered high enough to act early.
From Regulation to Prohibition
Canada first allowed crypto donations in 2019. These were treated as non-cash contributions, similar to property. However, the system had limits.
Donations were not eligible for tax credits. Contributions above $200 required public disclosure. Despite this, no major party used crypto donations in the 2021 or 2025 elections.
In 2022, Canada’s election authority pushed for tighter reporting rules. By November 2024, the recommendation changed to a full ban due to ongoing identification issues. Bill C-25 follows the stricter rules.
Related: US, UK, and Canada Launch Operation Atlantic Against Crypto Approval Phishing
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Source: https://coinedition.com/canada-considers-ban-on-political-cryptocurrency-donations-after-uk/
