If Robinhood’s proposed acquisition of Wonderfi is approved, the US Fintech company will gain control over BitBuy and Coinsquare and more than $2.1 billion in assets in detention.Dado Ruvic/Reuters
Vass Bednar is a recent podcast Globe and Mail and host contribution columnist. She is the Managing Director of the Canadian Shield Institute and is co-author of The Big Fix.
So far, much of our conversation about sovereignty has focused on tangible people, such as changing our own spending towards Canadian products and rescheduling summer holidays. That alone is not enough.
If mindful consumption was the first war, then the next stage of sovereignty means saying no to a merger that exposes the national infrastructure. Earlier this year, the federal government gave us more power to do just that. It’s already time to use it.
Regulators should carefully consider the proposed acquisition of Canadian digital asset platform Wonderfi Technologies Inc. by US fintech company Robinhood Markets Inc. If approved, Robinhood has control over BitBuy and Coinsquare (two of Canada’s largest regulated crypto exchanges) and over $2.1 billion in assets in detention.
This is not a marginal trade. Wonderfi is one of the last major Canadian-owned players in the space, built through a series of domestic acquisitions (Coinberry, Bitvo Inc., Coinsquare, Coinsmart and Bitbuy are all integrated under Wonderfi). Approving a transaction means transferring a key part of your homemade infrastructure, as the sector is mature.
Past controversies of Robinhood, like the infamous GameStop Saga and the ongoing SEC scrutiny, raise serious questions about how well it works under Canadian regulations expectations. Our entry into the market could strain our surveillance systems and reduce public confidence in Canada’s ability to manage digital finance.
More concerning, this move must be considered in the context of recent guidance, American stability, or establishment of national innovation for geniuses. American laws fix the US dollars to stablecoins and pinned cryptocurrencies to their underlying assets. It establishes the future dominance of global commerce.
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According to a report by Morgan Stanley, Robinhood moves deeply into digital payments for stubcoin and US dollar removal, with its presence in Canada potentially accelerating “digital dollarization,” reducing the Bank of Canada’s influence on monetary policy and payment innovation. In short, this merger risks outsource key layers of the digital payments economy to a platform optimized for growth rather than governance.
What’s worse, by allowing this acquisition to proceed without rigorous scrutiny, Canada is open to losing ownership of millions of financial platforms. It demonstrates a weakening of its long-term capabilities to build and host sovereign financial tools and cultivates a fintech ecosystem that is in line with domestic values and surveillance. Once lost, these capacity is difficult to recover.
We have never said anything before to protect our interests. When Australian BHP Billiton attempted a hostile US$39 billion takeover of Polishcorp, the crown jewel of Canada’s mining industry, Saskatchewan Prime Minister Bloodwall tied public opinion together, and Ottawa ultimately blocked the transaction under Canadian investment laws. It was one rare moment when Canada won by asserting its sovereignty over its resources.
We have also established ourselves in other sectors. In 1998, then Minister Paul Martin blocked two mergers between Canada’s largest banks (the Royal Bank of Canada and the Bank of Montreal and the CIBC of TD Bank). At the time, it was a bold move, and it continues to remind us that economic sovereignty sometimes means saying no.
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He is also a leader in the blockchain and crypto innovation space. Canada is the birthplace of Ethereum, the world’s second largest cryptocurrency platform by market capitalization. Co-founded by Canada’s Vitalic Butalin, Ethereum is the foundation of a global decentralized financial ecosystem. But like many Canadian origin innovations, it didn’t stay here. Its governance, infrastructure and economic impacts are now primarily functioning across our borders.
Canada has spent a century of construction institutions reflecting our values (often in times of crisis). Central banks, public broadcasters, national energy policy. US President Donald Trump says he wants to enable American companies to purchase Canadian banks. The proposed merger of Robinhood cannot be considered outside of this context.
In this hostile, unstable geopolitical moment, reviewing and potentially blocking mergers could be in Canada’s national interest, but a strong negative mood affiliation with cryptocurrencies could hinder the ability to assess companies as a form of financial infrastructure.
And Wonderfi’s dramatic history of governance adds to the perception of chaos, further complicating the policy defense of its role in ecosystems. With no comparable digital finance platforms of similar size, it may be wise for the Bank of Canada to reconsider previously shelved work and reconsider its wider impact on digital financial infrastructure.
Sovereignty is not just about what we buy. It’s about what we build, what we hold, and who decides what comes next.
