Crypto has an image problem, but a new Canadian industry coalition is hoping to change that.
Launched on Tuesday by 11 blockchain companies and digital asset exchanges, the Canadian Web3 Council hopes to give this country’s cryptocurrency industry a single voice, in a bid to convince local, provincial and federal governments to take the technology more seriously and embrace a national strategy for it.
Considering all the high-profile crypto-related hacks, instances of shoddy business practices at exchanges, stories of market manipulation and the documented use of digital currencies to facilitate crime, it is not difficult to understand why the sector’s reputation is tarnished.
The council’s members say this is why it has become important to destigmatize crypto, by educating people about its technological applications and economic potential. The group hopes this will lead to new policies and fewer restrictions for the industry.
The Web3 Council’s membership consists of Aquanow, Axiom Zen, Chainsafe Systems, Dapper Labs, Ether Capital, ETHGlobal, Figment, Informal Systems (Cosmos), Ledn, Wealthsimple and WonderFi Technologies Inc. Notably absent from the group are Tokens.com and CoinSmart Financial.
Getting the companies together took longer than expected, executives said in interviews. The coalition was originally set to launch in January, but then trucker protests – which barricaded border crossings and shut down central Ottawa, leading the federal government to invoke the Emergencies Act – began using cryptocurrencies to circumvent clampdowns on their fundraising efforts.
“A lot of people had to quickly learn about crypto or get used to the idea of it when they saw it was being used during the protests,” said Hatcher Lipton, chief operating officer at ChainSafe Systems, a Toronto-based research and development firm that specializes in blockchain technologies.
“It is debatable whether seeing crypto used during the protests was for better or for worse,” he added. “The problem is, as soon as you mention the word crypto now, certain people will immediately put you in that bag of bad actors, and I don’t think that’s fair. What we really don’t want is a few loud voices taking up the most space in a room, and that’s where this council fits in to take control of the narrative again.”
Jarrett Vaughan, a professor at the University of British Columbia’s Sauder School of Business who studies blockchains and cryptocurrencies, said the first thing he noticed about the council was its choice of name.
“I found it quite interesting they chose to call it ‘Web3′ instead of ‘crypto,’” he said. “It’s a great strategy, because it communicates a constructed and crafted narrative, much like this council is hoping to do. I think it will remove the unpredictability that we’ve seen with the wild west side of things with crypto so far.”
Still, Prof. Vaughan said, he finds it “kind of ironic that the council is trying to centralize a message for a sector fully based on decentralization.”
Web3, also called Web 3.0, is touted by its proponents as a new, more decentralized wave of the internet – distinguishable from Web 2.0, a digital landscape based on user-generated content and social-media apps, whose creation was led by giant tech companies such as Facebook and Google. Web 1.0 refers to a period between 1991 and 2004, when much of the web was filled with static pages of text.
Web3 is a work in progress. Its boosters say all this new internet architecture will not require traditional banks or government institutions to function because it will rely instead on digital tokens, often based on blockchain ledgers.
In a Web3 world, such tokens would become involved in the inner workings of almost everything people do online – even things that have nothing to do with money. Because of the expansive nature of the concept, Web3 has become a buzzword used for describing all kinds of new internet technologies and businesses, particularly those related to the crypto and blockchain sectors.
Brian Mosoff, a founding Web3 Council member and CEO of Ether Capital, a public company that provides investors with direct access to ethereum, said it was never the group’s intention to represent all of Canadian crypto.
“We will likely not see eye to eye on a lot of issues, and certainly there are a lot of people we won’t represent with what we say. But I think it’s worth trying to get our thoughts in the same place, especially for regulated players and those looking to seek regulation. Because right now many of these conversations happen in silos,” he said.
Mr. Mosoff said negative news stories about crypto “are usually just zooming into a very specific case to push certain beliefs against the sector.” He noted that while cryptocurrency was used to fund the freedom convoy protests, it is also being used to support Ukraine’s efforts to resist Russia’s invasion.
“I think the point of this group is really to have mature companies at the table that are thinking about the long-term impacts of all the decisions that we’re making,” said Mauricio Di Bartolomeo, co-founder of Ledn, a cryptocurrency savings and lending company that is based in Toronto.
“Canada is in an incredible place with Web3, where we can really lead the charge here. We failed to do that with Web 2.0, but it’s not too late to become a leader with this.”
Sonja Solomun, research director at McGill University’s Centre for Media, Technology and Democracy, said she thinks the Web3 Council’s insistence on the economic importance of cryptocurrencies is a way of making the technology’s risks seem ordinary and inevitable.
“The reality is, the public are actively reshaping that future by pushing back on these very assumptions through critical debates about the social, economic and environmental implications of crypto and bitcoin mining,” she said.
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