Canada is moving closer to banning political donations made in cryptocurrency, as lawmakers in Ottawa tighten rules around how money flows into elections.
That’s after a proposed law — Bill C-25, the Strong and Free Elections Act — passed a second reading in the House of Commons on Friday. The vote signals that lawmakers support the bill in principle and will now study it in detail at committee, where amendments can still be made.
The legislation would prohibit political parties and candidates from accepting cryptocurrency donations, closing what regulators see as a gap in campaign finance rules.
First introduced on March 26, the bill is a broader overhaul of election laws aimed at strengthening transparency, tightening enforcement and reducing the risk of foreign interference. As Cointelegraph previously reported, crypto donations became a focal point due to concerns over traceability and compliance with existing limits.
While the bill is not solely focused on digital assets, it explicitly includes crypto in its restrictions on political financing.
There is no fixed date yet for when Bill C-25 will be taken up in committee.
An excerpt from Bill C-25. Source: Parliament of Canada
Related: Canada’s bid to ban crypto donations highlights transparency issue
Political ban comes amid Canada’s crypto embrace
The proposed ban comes as cryptocurrencies and blockchain infrastructure become more embedded in Canada’s financial system.
Regulators have advanced stablecoin frameworks that would give oversight powers to the Bank of Canada, while also refining rules for crypto investment funds, custodians and cold storage practices.
Canadian lawmakers have identified several potential benefits of a national stablecoin framework. Source: Government of Canada
This shift is unfolding under Prime Minister Mark Carney, a former central banker who has previously expressed skepticism about cryptocurrencies. Despite that stance, policymakers are moving toward a more defined regulatory structure that integrates digital assets into the financial system while imposing tighter limits on their use in sensitive areas such as elections.
Related: Deloitte, Stablecorp plan stablecoin infrastructure for Canadian institutions