Canada's federal government has proposed legislation that would ban cryptocurrency donations to political parties, candidates and third-party election advertisers, closing a fundraising channel that has seen virtually no use since it was first permitted in 2019.

Bill C-25, the Strong and Free Elections Act, was introduced on March 26 by Government House Leader Steven MacKinnon. The bill groups crypto alongside money orders and prepaid cards as payment methods that are difficult to trace, and would prohibit all three across the federal political system.

The ban would cover registered parties, riding associations, candidates, leadership and nomination contestants, and third parties engaged in election advertising.

"These targeted priority amendments address recommendations from the public inquiry into foreign interference in federal electoral process and democratic institutions, and also from the chief electoral officer and the commissioner of Canada elections," MacKinnon said. 

Canada first allowed crypto donations in 2019 under an administrative framework that classified them as non-monetary contributions, similar to property. But no major party ever publicly accepted them, and no contributions were disclosed in either the 2021 or 2025 elections. Under the 2019 rules, crypto contributions were not eligible for tax receipts, a significant disincentive in a system where donors routinely claim credits.

The country's Chief Electoral Officer, Stéphane Perrault, initially favored tighter regulation rather than an outright ban. In a June 2022 post-election report, Perrault's office recommended that all crypto contributions be receipted and reported regardless of value, closing a provision that assigned nil value to contributions of CAD $200 or less from non-professional sellers and effectively exempted small crypto donations from the regulated financing regime.

By November 2024, that position had shifted to a call for full prohibition, on the grounds that crypto's pseudonymity makes contributor identification "fundamentally difficult," according to CBC.

Bill C-25 is the second attempt to enact the ban. Its predecessor, Bill C-65, contained identical provisions but died when Parliament was prorogued in January 2025. The new bill has completed its first reading and still faces multiple readings, committee review, Senate passage and royal assent before becoming law.

Steep penalties

Recipients of crypto donations made in violation of the ban would have 30 days to return, destroy, or convert and remit the funds to the Receiver General. Administrative penalties would reach up to twice the value of the contribution.

Maximum fines would also increase sharply under the broader bill. Individual penalties would rise from CAD $1,500 to CAD $25,000, and organizational fines from CAD $5,000 to CAD $100,000, per the bill's language. 

U.K. parallel

The timing is notable. Canada introduced Bill C-25 just one day after U.K. Prime Minister Keir Starmer announced a moratorium on crypto donations to British political parties, citing risks around illicit finance and foreign interference.

Starmer's announcement followed weeks of escalating pressure. A cross-party parliamentary committee had urged an immediate ban on crypto political donations in mid-March, calling them an "unacceptably high risk." In January, seven Labour committee chairs called on the government to include a crypto donation ban in the forthcoming Elections Bill.

Both countries frame the bans as defensive measures against foreign interference rather than responses to documented abuse.

U.S. divergence

The coordinated moves by Canada and the U.K. sharpen a growing split with the United States, where the Federal Election Commission has permitted crypto donations since a 2014 advisory opinion and crypto-backed super PACs have become a major force in American politics.

The crypto industry spent more than $190 million during the 2024 U.S. election cycle through vehicles like Fairshake, which became the largest super PAC of the cycle with over $200 million raised. No federal ban on crypto donations exists in the U.S., though several individual states have restricted or prohibited them.