An ICTC Overview

Overview | Chain Reaction

Investment in Canada’s Blockchain Ecosystem

Access the full study, including all sources and methodology, here.

Study Scope

This study provides a detailed examination of blockchain technology, the Canadian blockchain ecosystem, and explores the opportunities and challenges for blockchain-focused foreign direct investment (FDI).

Chain Reaction: Investment in Canada’s Blockchain Ecosystem also compares Canada’s blockchain ecosystem to other key global centres of blockchain activity and presents the insights of industry experts on the value of blockchain in general and across specific sectors.

The industry experts interviewed for this study also provide opinions about Canada as a destination for blockchain FDI, helping articulate Canada’s value position for blockchain and its ability to attract investment.

(These industry interviews were conducted prior to COVID-19. While Chain Reaction touches briefly on the impact of COVID-19 for blockchain, further research is needed to understand the full impacts of the pandemic on the overall economy, emerging technologies like blockchain, and Canadian opportunities for investment attraction.)

Study Context

Record keeping has been central to human civilization for millennia. Ledgers and contracts underpin the legal, political, and economic systems; however, traditional record keeping is fraught with delays, waste, overcharging, corruption, and security risks that amount to billions in lost revenue.

Blockchain technology for record keeping offers the following key features:

  • Transparency
  • Immutability
  • Optimized processes
  • The potential to reinvent entire value chains, especially when combined with other advanced technologies such as artificial intelligence (AI) and the internet of things (IoT).

Today, businesses are becoming aware of blockchain’s practical applications.

A 2018 Deloitte’s global blockchain survey of over 1,000 respondents (mostly employed by large companies of over $500 million-plus revenue) found that only 5% of businesses reported having no plans for blockchain investment. About 39% of respondents said their organization plans to invest $5 million or more in blockchain technology.

While the initial cryptocurrency hype has now subsided (Bitcoin is a blockchain-based currency), the conflation of blockchain with cryptocurrency persists. A lack of understanding of blockchain remains a barrier to wider adoption.

This study builds on ICTC’s 2019 blockchain report Building Canadian Consensus, which provides an introduction to blockchain technology in Canada, blockchain trends, blockchain workforce by sector, type, and size of company).

Key Terms

Blockchain: A type of distributed (decentralized) ledger, designed to record digital transactions, consisting of immutable records.

Bitcoin: The first decentralized cryptocurrency based on blockchain technology, introduced in 2008.

Distributed Ledger Technology (DLT): A database of transactions hosted across a wide variety of servers and locations (as opposed to centralized control). Records are only stored upon reaching consensus by multiple parties.

Decentralized Application (DApp): A distributed app across many servers (such as Ethereum or Bitcoin).

Ethereum: An open source, public or private blockchain-based platform for DApps featuring smart contract functionality (created in Canada).

Nodes: People or computers participating in the blockchain.

Mining: A process of adding new “blocks” to a blockchain. When a node presents a transaction, it is reviewed by other node(s); then it waits in a pool with other transactions that is published in one “block” onto a blockchain. Mining nodes are compensated with new cryptocurrency for validating and publishing new blocks

Sybil or 51% attack: A security risk to blockchain that is made possible when a group of nodes controls over 50% of the voting power in a blockchain (either through creating numerous false identities [hence “Sybil”] or by holding over 50% of the network’s mining or processing power.

General Study Findings

Blockchain is a growing technology of interest that currently struggles with adoption and large-scale implementation.

Canada is perceived as having a maturing blockchain ecosystem.

Industry experts interviewed for this study (across 10-plus markets) identified cost savings due to improved efficiency as a key value proposition for blockchain.

The study interviewees noted that blockchain education in Canada and skilled talent are attractive features for FDI in Canada, whereas regulatory uncertainty and a conservative business climate in Canada are impediments to FDI.

Blockchain Basics

A blockchain is a type of distributed ledger technology (DLT) that is hosted on numerous servers and continually updated by its users and verified by other users.

All entries into a blockchain are permanent. New entries may be written — including changes to a previous record — but existing entries cannot be deleted.

Various types of blockchain ledgers include the following:

Detailed Findings

Canada’s Blockchain Ecosystem

Blockchain in Canada started in 2012 with a small group of crypto enthusiasts in Toronto. ICTC’s previous blockchain report, Building Canadian Consensus, found that Canada’s blockchain workforce comprised of over 1600 professionals in 2019

Following the recent “Crypto Winter” (the dramatic fall in the price of Bitcoin in 2018), the wider blockchain ecosystem is showing signs of maturation.

The predominant blockchain hubs are in Toronto and Vancouver, representing 65% of the country’s total blockchain-identified workers (2019).

Blockchain Growth

Blockchain activity grew almost 15-fold from 2015 to 2019. Notably, that growth is accompanied by an increase in technical roles:

  • From 2015 to 2019, founders of blockchain companies have been declining as a proportion of all blockchain workers, to 14% from 23%

Blockchain Innovation in Canada

Canada now has many successful blockchain companies and research hubs. This strength is reflected in innovations such as Ethereum, which was created in Canada and is considered one of the most important and versatile blockchain platforms. Ether — the cryptocurrency generated by the Ethereum platform — has surpassed $10 billion in market capitalization.

Who’s Who in Blockchain

Toronto leaders behind the Ethereum platform are Vitalik Buterin and Joseph Lubin.

  • Other key figures in the Ethereum movement include Anthony Di Iorio and Gavin Wood
  • Coauthor of the Blockchain Revolution, Alex Tapscott, is also globally recognized in blockchain

Beyond Toronto

Toronto was the first major hub for blockchain in Canada, but by 2019 Vancouver startedto overtake it. BC is recognized for itself diversity of blockchain projects.

Blockchain Education

Canadian academic institutions are incorporating blockchain curricula to produce skilled employees.

  • Toronto-based George Brown College offers Canada’s first full-time blockchain certificate (“Blockchain Development Program”)
  • York University’s Blockchain Academy in Toronto provides intensive blockchain training
  • York also offers a certificate in blockchain development
  • In 2020, the University of British Columbia introduced masters- and doctoral-level specialization in blockchain

Many blockchain workers in Canada’s blockchain ecosystem were trained abroad.

Notable Blockchain Developments Abroad

United States

The US blockchain ecosystem is one the largest and most robust in the world, with over 1400 companies working in the industry, receiving large corporate investments in blockchain pilot projects and initiatives.

Major US blockchain hubs are in New York, San Francisco, Boston, and Chicago. Smaller hubs are in Austin, Atlanta, Denver, Raleigh, and Seattle.

  • Blockchain companies in the US received $8.4 billion USD from 2012–19, with a peak of $3.5 billion in 2018 (Pitchbook data)
  • Blockchain companies work on diverse projects — cryptocurrency, digital payments, analytics and data management, asset management, enterprise software development, and decentralized financial services
  • IBM is piloting its permissioned Hyperledger platform for industries in finance, food, global trade, and healthcare
  • In 2019, Facebook’s announced its Libra project to develop a “stablecoin” built on blockchain technology, indexed to a basket of global fiat currencies including the US dollar. (Currently the Libra project is beset by setbacks and the departure of founding members.)

Despite regulatory uncertainty in the US, corporate investments in blockchain continue to grow.


In 2019, the Chinese president urged China to “seize the opportunity” presented by blockchain and take a leading position in its development.

China’s ensuing cryptography legislation is recognized as one of the first clear instances of a large global power backing the technology.

Encouraged by this public endorsement of blockchain, Chinese banks, tech giants, startups, and government agencies have prioritized blockchain projects:

  • Over 500 blockchain projects have been registered with the Chinese government since March 2019
  • Tech giant Baidu, the so-called “Google of China,” launched a beta-version of its Blockchain-as-a-Service (BaaS) platform Xuperchain in 2020 (allowing small and medium sized businesses to cheaply launch their own custom decentralized apps)
  • The Chinese government also launched a blockchain pilot zone on the island province of Hainan with $148 million of funding for blockchain companies

This support for blockchain in China runs parallel to government suppression of cryptocurrency exchanges and the public blockchains that underpin them. China has had a ban on initial coin offerings since 2017 and discourages the mining of cryptocurrencies.

European Union

The EU leads in blockchain adoption and regulation.

  • Spanish banks BBVA and Santander, telecom operator Telefonica, and Danish shipping giant Maersk are some key European companies with blockchain projects underway
  • Switzerland is a leader for regulation on blockchain and cryptocurrencies
  • Malta and Gibraltar were amongst the first to establish DLT-related regulations and to promote blockchain innovation
  • Liechtenstein’s “Blockchain Act” (in effect since 2019) is a “comprehensive regulation of the token economy”
  • Germany released a comprehensive blockchain strategy in 2019

Wider efforts include European Commission’s 30-country pact on blockchain, the “European Blockchain Partnership,” to enable EU-wide collaboration on regulatory and technical matters (allocated €300 million in blockchain investment over a three-year period, beginning in 2018).

Blockchain and COVID-19

Globally, researchers and businesses are coming together to develop mitigations and solutions in response to the crisis.

  • Civitas, an app by Toronto-based startup Emerge, is relying on blockchain technology to help prevent and track the spread of COVID-19 in Latin America
  • Ubrich, an IoT blockchain-based organization, and CENTOGENE, a healthcare data firm, joined forces to address privacy issues in collecting of personal data related to the pandemic
  • Canadian company Vaultie is developing a blockchain-secured digital-signature platform to help people perform critical responsibilities from home (notarization, real estate documents, etc.)
Photo by chuttersnap on Unsplash

Issues and Perspectives

Better Approaches to Blockchain Technology Needed

The Current Proof of Work (PoW) consensus protocol are critical blockchain hurdles, involving unreasonably high costs for blockchain scaling, energy consumption, transaction costs, latency and security.

True economies of scale and value are only expected when multiple competitors in an industry or sector come together in a consortium to build a non-competitive technology layer.

  • Nearly 45% of interviewees raised this issue, noting that this type of “co-opetition” is a tricky dynamic to initiate and coordinate
  • The notion of blockchain as a “we technology” highlights the need for large-scale cooperation at an industry level. Fragmented attempts at monetization may derail the overall goal of improving the technology for mass adoption

Challenges to FDI

Over 80% of interviewees in this study identified concerns about regulatory uncertainty as potentially curtailing investment. Key worries were:

  • Slow regulation developments for know-your-customer (KYC) and anti-money laundering provisions in banking
  • Laws regulating access, control, and storage of personal data

Over 60% of the interviewees in this study highlighted that until larger questions of regulation are resolved, the return on investment in blockchain solutions would remain too uncertain to allow for any meaningful large-scale capital expenditure.

Canada’s tech sector is also more risk averse than that of the US or other international competitors. Weak business cases with unclear outcomes or highly conservative risk tolerances were also highlighted as a challenge.

Noted was also Canada’s relatively small tech ecosystem and faltering private and public investment in blockchain.

Positive Signs for Blockchain Regulation in Canada

Blockchain-related policy in Canada is, however, under consideration.

  • Blockchain technology is a priority for theCanadian Securities Administrators for 2019–2022
  • DLT is under review by Canada’s federal agencies (the Project Jasper launched in 2016 is a collaboration between Payments Canada, the Bank of Canada, TMX Group, and Accenture that explores DLT in settling payments

Cross-Disciplinary Talent Needed

Nearly 50% of interviewees in this study pointed to the need for cross-disciplinary talent capable of working at the intersection of technology and business.

(Some view current blockchain solutions aimed at unlocking value through cost savings and waste reduction as low hanging fruit. Uncovering new value propositions, novel revenue streams, and reimagining entire value chains will require both deep knowledge of the foundational technologies and the business environment, highlighting the need for multi-disciplinary talent.)

Blockchain Across Sectors

Financial services, retail, and public administration are among the highest impact and highest feasibility sectors for blockchain.

ICTC’s report Building Canadian Consensus examines an array of blockchain use cases, including advanced manufacturing, agriculture and ocean technology, business and financial services, digital technology, life sciences, natural resources, and transportation and logistics.

Attracting Blockchain FDI to Canada

Interviewees interviewed in this study viewed Canada favourably, recognizing it is home to blockchain experts and a highly skilled talent base, with key hubs of blockchain innovation and educational support. More than 70% of interviewees stated that Canada’s biggest asset to FDI attraction was its access to and availability of human capital.

Interviewees expressed a lukewarm response specifically to blockchain-based investment to Canada, expressing concern about a conservative business culture, lagging private and public sector investment, and slow movement on the regulation front as key obstacles preventing FDI.

Nonetheless, Canada’s blockchain ecosystem benefits from the ability to attract skilled workers from around the world. Most interviewees highlighted that Canada’s immigration system prioritizes skilled talent.

Many interviewees felt Canada was making considerable advances in blockchain intellectual property.

Many interviewees saw digital IDs as a promising area of blockchain application, in which Canada stands to grow and show global leadership. Examples include:

  • BC/Ontario collaboration on a Verifiable Organizations Network (identity management and ethical handling and storage of personal data)
  • PanCanadian Trust Framework Overview, created by the Digital ID and Authentication Council of Canada (focuses on the requirements and goals of the Canadian digital ID ecosystem)

Despite the current challenges to blockchain FDI, interviewees were optimistic about Canada’s potential to overcome them and create a vibrant blockchain ecosystem that attracts investment from around the world.



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Information and Communications Technology Council (ICTC) - Conseil des technologies de l’information et des communications (CTIC)