Overview
Although Canada has led the world in adopting exchange-traded funds, not one of the major institutions in Canada has announced that it would be offering digital funds for clients as of yet. It is only a matter of time before realizing how much money they are missing out on. The US banks are ahead of the curve on offering digital funds. At least one Canadian Financial institution is capitalizing on this opportunity, and they are truly going to win big.
WealthSimple
Wealthsimple has become extremely popular in Canada for do-it-yourself investors. Because they offer no account fees and $0 commissions, as of September 22nd, WealthSimple announced all users can now buy Bitcoin or Ethereum instantly with no account minimums, pricing transparency, and no fees to deposit or withdraw. All coins are held with Gemini Trust Company, one of the world’s biggest crypto exchanges. Wealthsimple is ahead of the pack in Canada with Crypto adoption, and I think offering no account minimums is a massive opportunity.
Millennials Will Be The Richest Generation
Another reason banks need to pivot quickly is that millennials and Generation Z are the main contributors to the crypto ecosystem. Forbes came out with a study mentioning that by the year 2030 that Millennials worldwide will inherit 68 trillion dollars from their baby boomer parents. This will be the most significant wealth transfer in modern times. Banks should be thinking about this because do you think millennials will be investing their money in a traditional index or mutual fund? Of course, no,t it will be going right into cryptocurrencies. Ten years from now, if inflation continues, Crypto will be the ultimate hedge and investment for anyone going forward. Najib Razak, the former prime minister of Malaysia, once said, “The world is changing quickly, and we must be ready to change with it or risk being left behind,” not specific to Crypto, but the same statement applies!
Comparing US vs Canadian Banks in Crypto Adoption
| Aspect | US Banks | Canadian Banks |
|---|---|---|
| Crypto Support | Many offer digital funds and custodial crypto services | Limited or no direct crypto offerings |
| Client Focus | High-net-worth and retail investors | Primarily traditional finance clients |
| Adoption Speed | Fast and proactive | Slow and cautious |
| Regulatory Environment | Supportive and evolving | Conservative and restrictive |
Conclusion
Bitcoin adoption is still in the early innings. The banks in the US are doing a fantastic job accepting and using digital currencies as an option for their high-net-worth clients, and this only appears to be the beginning. Canadian banks need to pick up the slack. Or they will not be around in 10 years. Institutions need to realize they have significant competition. My theory is that crypto exchange companies like Bitgo, Shakepay, Coinbase, and Gemini will replace traditional institutions and be known as world banks. Gemini came out with a report mentioning that since the start of 2021. They are averaging 50k new signups weekly. Banks will begin to notice their assets under management fall while crypto exchange companies grow.
