00:00:00.260Politicians and pundits all across Canada are now talking about cryptocurrency, but who is telling us the truth?
00:00:06.260We're going to try to make sense of it all today on the show. I'm Candice Malcolm, and this is The Candice Malcolm Show.
00:00:21.860Hi, everyone. Thank you so much for tuning into the program.
00:00:24.640So as you know, I was pretty critical of last week's conservative debate in Edmonton.
00:00:29.440I didn't think it really allowed for much of an exchange of ideas.
00:00:33.040However, one of the most interesting and explosive moments of the debate happened when the candidates began criticizing and piling on Pierre Polyev for his positions about crypto.
00:00:43.900It seemed like some of the candidates didn't really understand the difference between decentralized currencies like Bitcoin versus a government centralized digital currency.
00:00:55.120And you could see that Pierre Polyev was kind of smiling because it really showed almost like a generational divide where most of the candidates, I would say five out of six, just don't really understand Bitcoin or blockchain or cryptocurrencies.
00:01:07.400And Pierre sort of has a monopoly on this topic.
00:01:10.220And so I wanted to bring in someone today to help make sense of this entire topic and help us understand what the real issue is.
00:01:17.400And so I'm very pleased today to be joined by Matt Spoke.
00:01:20.920Matt is one of the leading experts in conservative circles when it comes to cryptocurrency.
00:01:25.360He's the founder and CEO of a company called Moves, which is an all-in-one financial app that helps gig workers manage their business.
00:01:31.660Matt is based in Toronto, and he's become a leading advocate for the potential social benefits of decentralized technologies in the world.
00:01:39.180He's been published in Forbes, The Hub, and other outlets.
00:01:56.780So let's just start off by asking like a very sort of basic question for people who aren't really familiar with these terms, don't really know what we're talking about.
00:02:05.440If you could help us understand like what is blockchain, what is decentralized currency, what is crypto, and what is Bitcoin?
00:02:12.080Just give us a little overview, please.
00:02:14.420Yeah, I mean, I think without getting into the technical weeds, because you'll read a lot of stuff online that gets into language that most people will just glaze over at,
00:02:21.960because it's a very technically heavy or a lot of technical jargon in this industry.
00:02:26.780So I'd say broadly, the idea that sort of underpins Bitcoin and a lot of the experiments happening in the cryptocurrency space is sort of a concept of building a currency system that is detached from any central authority or detached from a central government that acts as sort of the issuing body of a currency or the layer of trust underpinning a currency.
00:02:46.300There's a technology that underpins a lot of these currencies that sort of broadly become known as blockchain technology.
00:02:52.100It is important to understand that this is sort of like, it's not all of these currencies are not equal.
00:02:57.400There are some currencies that have been around and proven the resilience for a lot longer.
00:03:01.120There are some that are a lot more experimental.
00:03:02.480You'll hear lots of negative sort of skeptics in the in the media that talk that will point to the examples of some of the more, you know, more some of the more the big news items of frauds and scams and Ponzi schemes and others to try to distract people from sort of like, what is the underlying technology and what's its what's its potential.
00:03:20.480I think broadly, I like to think about this as like, as people lose confidence in their governments, not necessarily, you know, their government's ability to to to maintain sovereignty over their countries, but just their government's ability to make good decisions, good decisions as it relates to monetary policy.
00:03:36.220We're now being given a choice as to are there other assets that we can flee into.
00:03:42.600And I'd say particularly Bitcoin has proven itself quite resilient and almost it's almost on a level playing field of a lot of national currencies.
00:03:48.760If you if you were a resident of Venezuela, you know, Bitcoin would be a very attractive currency for you.
00:03:52.980So there's lots of debate around whether that translates to Canadians and whether that translates to Americans and other Western countries.
00:03:58.360But I think there is something to be paying attention to.
00:04:01.480And I think the risk that the conservatives, you know, last week really started to show is you you want to be careful to not position yourself as sort of the party of the neophytes like that anything that you don't understand and anything that is new, you automatically take a negative tone towards it.
00:04:15.360And I think care is definitely standing out as somebody who at least, you know, not only is an open mind, I think he actually very fundamentally understands what's going on in this space.
00:04:22.980But anyways, we can get into it in more depth, but that'd be my word of caution is like if you don't understand something, it's better to not have an opinion than a strong opinion against it.
00:04:31.720Well, and also just to make sure that the points you're making are clear, because there's obviously a big difference between a decentralized currency.
00:04:38.180We could talk about some of the pros and cons about those like versus what the governments are trying to do, which is roll out their own sort of version of digital currency.
00:04:46.120So we'll definitely talk about government's version of digital currency.
00:04:49.360But I do want to ask you, because, you know, you said if you live in a country like Venezuela, it might be better to use Bitcoin as opposed to the centralized currency.
00:04:56.540Well, as we've seen this month, the price of Bitcoin has plunged its lowest since 2020.
00:05:01.040According to New York Times, more than $300 billion of Coinbase was wiped out in a crash in crypto prices.
00:05:07.000Look, I've been following Bitcoin for maybe about 10 years, and I remember back in like 2015, people were saying, oh, Bitcoin's over, it's done.
00:05:15.960And there's definitely been ups and downs, and it's been a wild ride.
00:05:20.180But there does seem to be sort of a fundamental instability when it comes to the value.
00:05:25.420So I'm wondering if you could help clarify, like, why you think it could be a better alternative to a government managed government monopoly, you know, of just a regular currency that we that we've had for the last 50, 50 years or so.
00:05:40.600Yeah. And I mean, I think it's worth being clear here.
00:05:42.620And this has probably been lost in the shuffle as it relates to the conservative leadership race.
00:05:46.560I don't think anybody is suggesting that we drop the Canadian dollar and I'll start paying for our groceries in Bitcoin.
00:05:52.040I don't think that that's in the cards today.
00:05:54.200I don't think that that's in the cards for the foreseeable future, maybe ever.
00:05:57.320I think what Bitcoin is introducing to the world is a new form of asset that can exist within a portfolio of assets similar to gold historically.
00:06:05.000As assets are discovered by the market, their prices can be extremely volatile, right?
00:06:11.200So this is a this is an asset that by global sort of penetration metrics is only scraping under five percent of people in the world that have actually touched or held a Bitcoin or held a fraction of a Bitcoin.
00:06:23.920We're very much in the early days of global adoption.
00:06:27.360And as people discover the asset in some periods, that will lead to very high volatility and upward price momentum.
00:06:33.540And as markets sort of correct, that can lead to very aggressive volatility downwards.
00:06:37.120I think anybody interacting with the space needs to go in eyes wide open and consider that there is a lot of risk when assets, newer assets like this can be volatile for a long time.
00:06:48.060I think what's to sort of decouple the conversation is to like, what is the price of Bitcoin today?
00:06:52.420What was it last week? Was it last year versus what does the long term potential of this new type of currency design represent in the future?
00:06:59.620We should be thinking about policy from the perspective of like the next decades, not the next month.
00:07:05.120And I think we've seen a lot of this sort of distraction from, you know, I got an email from Patrick Brand's campaign last week talking about, oh, you know, if you had listened to Pierre Polyeb, you would have put all of your dollars into Bitcoin and lost 50 percent of your life savings.
00:07:17.420Nobody is advocating for that right now.
00:07:19.100So it's really like the long term potential.
00:07:21.820When you go from five percent adoption to 30 percent adoption to 50 percent adoption, all of a sudden the volatility associated with this asset will change quite a bit.
00:07:28.580But it's also worth noting that while the markets for Bitcoin have corrected aggressively, so have the markets for every other regulated traditional asset in the world.
00:07:35.660I mean, the price of stock on Netflix and Shopify and all these other companies are also feeling a lot of pressure as the market's correct.
00:07:43.520And I would say that the cause of a lot of that is actually government monetary policy.
00:07:48.200I mean, it's the amount of money that we've inflated and put into the system that effectively fueled this huge run up in the stock markets that had sort of a trickle down effect into the crypto markets.
00:07:57.440And now all of a sudden governments are starting to pull back on their money printing.
00:08:00.700They're starting to sort of revisit their quantitative easing policies.
00:08:03.520And they're one and then they're turning around and blaming the crypto markets for volatility.
00:08:06.840You know, it's a little bit of a of an unfair assessment when you consider sort of where all this money originally came from over the last two years.
00:08:14.060Right. And just to go back to Patrick Brown, sort of straw man, it's like, you know, with any investment strategy, you're not going to put all your eggs in one basket.
00:08:22.080Right. Like you're even even if you're playing, if you're putting money in the stock market in a mutual fund or an index fund, it's like you're going to put some money in, you know, energy stocks, some money in tech.
00:08:30.400And you're going to try to have a very diversified portfolio.
00:08:32.920And so why not include precious metals or decentralized currency?
00:08:36.860Matt, I'm really glad you mentioned inflation, because one of the things that I sort of get frustrated upon,
00:08:42.500you have the prime minister of our country who openly admitted during the last election that he doesn't really think about monetary policy, doesn't really care.
00:08:49.960You know, he did go on to say that, you know, what he thinks about his families and how they can afford things.
00:08:54.060But how can you decouple those those two?
00:08:57.480The line from the administration, which is parroted by the legacy media, is that inflation is just caused by global forces.
00:09:03.620And it has nothing to do with monetary policy, nothing to do with the Bank of Canada, nothing to do with the debt that Justin Trudeau has acquired during the pandemic.
00:09:11.100And so I'm wondering if you could if you could sort of comment and help us understand the connection between monetary policy,
00:09:18.480how the government spends and the printing of money with inflation and sort of help help clarify that issue a little bit.
00:09:26.900Yeah, I think, you know, I'm not I won't pretend to be an economist or somebody who's got, you know, a deep, a deep background in monetary policy.
00:09:34.460But but I think, you know, the really the basics in my mind are that we we live within a system of fiat currency,
00:09:40.200which effectively means governments can decide through their central banks, but also through their own their own fiscal policy,
00:09:46.760how much how much debt they want to take on, how much money they want in the economy.
00:09:51.440And generally, the money that we have in our wallets or in our bank accounts is all just backed by our level of confidence in our government's ability to repay that debt.
00:09:59.420So we're effectively sitting on IOUs that we call Canadian dollars.
00:10:02.960These are IOUs that somebody will honor the value of that dollar when it comes time for me to actually withdraw it from my account and spend it in the economy.
00:10:10.520As as the the proportion of how much of these IOUs sort of exist, this is, you know, as central banks inflate the currency supply, the level of confidence sort of decreases over time.
00:10:21.940And, you know, we don't see the huge negative consequences the way that you might in economies where there is more hyperinflationary environments.
00:10:31.100But, you know, we're on a slippery slope towards a a set of Western, you know, what historically would have been stable economies that have gone probably a few steps too far in overusing this lever.
00:10:42.360You know, it's easy to point to the world's average inflation and say, hey, it's not our fault.
00:10:46.640It's really the world is going down this this this path.
00:10:49.600But I think it really points to the fact that most Western economies are suffering from the exact same the same illness.
00:10:55.660It's it's governments that don't know how to constrain themselves as governments that would rather spend than be responsible and think about sort of the future impacts of their decisions.
00:11:03.540You know, Bitcoin in this context is really interesting to me because it sort of brings us back to a conversation around a sort of hard money standard.
00:11:12.500You know, before the 1970s, the world existed on a gold standard for the most part.
00:11:17.520And the gold standard effectively restrained government's ability to decide unilaterally how much money they wanted to put into their economies because their money, in theory, was backed by physical reserves of gold.
00:11:28.240And, you know, I think it was the Nixon administration that sort of started pushing away from this in the 1970s, but because they wanted to spend more than they had in their reserves.
00:11:36.740And naturally, there was a tendency and then every government around the world that had sort of pegged themselves to the U.S. dollar, which was quite common after World War Two, all of a sudden had to decouple their pegs from the U.S. dollar and all start moving towards this sort of fiat standard.
00:11:48.180And it started this very quick path towards government debt being a norm.
00:11:54.900And I think there are scenarios when government debt is totally appropriate, but when it becomes sort of like our modus operandi, we don't know how to operate without debt.
00:12:02.760I think it leads to potentially a slippery slope that we're going to start feeling the consequences of in our generation, maybe not our parents' generations, but yeah.
00:12:11.400Well, Canada's lived through it, right?
00:12:12.820Like anyone who's familiar with the financial situation, I've studied a little bit in the 90s, Canada couldn't find anyone to buy our debt.
00:12:19.300And the New York, the Wall Street Journal infamously called Canada the Canadian dollar, the northern peso, and said we were basically an honorary part of the third world.
00:12:28.460And it basically caused the liberal governments under Jean-Claude Chen and his finance minister, Paul Martin, had to drastically, drastically, drastically reduce the size of government.
00:12:38.040So we've been there as a country, we've learned that lesson, seen the norm, was heading back towards fiscal responsibility and balanced budgets until Justin Trudeau rolled around and really did something unprecedented with the amount of spending.
00:12:54.020I did want to ask you a little bit about the politics on the conservative side because Pierre Polyev was getting sort of attacked from all sides during the debate last week.
00:13:04.520You know, there's two components of it that were interesting to me.
00:13:06.380One, Lesson Lewis's attack sort of fell flat because she didn't really seem to understand the difference between, like I said, a decentralized currency and a government digital currency.
00:13:16.760But there is some truth to the attack that Patrick Brown was saying because Pierre, at a campaign stop in London, Ontario, back in March, he said that Bitcoin lets Canadians opt out of inflation.
00:13:28.060Canadians need more financial freedom.
00:13:29.520He said that the government is ruining the Canadian dollar, so Canadians should have the financial freedom to use other money, such as Bitcoin.
00:13:36.040Canadians need less financial control for politicians and bankers, more financial freedom for the people.
00:13:42.340Obviously, you know, like we mentioned, the price of Bitcoin has gone down pretty tremendously.
00:13:46.360So I'm wondering what you think of the lines of attack, Pierre's line there about opting out of inflation.
00:13:56.080Do you think do you think Pierre is on to something or do you think he was being a little reckless with that comment?
00:14:01.140I mean, I don't think he was being reckless.
00:14:02.920I think he's trying to make a point that requires a little bit of exaggeration to say, you know, I think the his his his his critics will obviously jump to the most extreme interpretation of what he was trying to say.
00:14:13.920And this is what his opponents in the conservative race have been sort of accusing him of is suggesting that we should all be fleeing away from the Canadian dollar towards Bitcoin, which I don't think is what he intends.
00:14:23.340I mean, in fact, I know it's not what he intends to say when he talks about this.
00:14:26.620I think he's talking about a design of a monetary system that is worth us having an open mind to.
00:14:31.960It's worth us as a country encouraging our citizens to be more educated on and and frankly, designing policies that don't penalize people if they want to be exposed in this market.
00:14:41.880And, you know, at that that that stop in London that you're referencing, in particular, that Chawarma business is a business that, as an example, decided, you know, over the last couple of years to shift some of its balance sheet from Canadian dollars into Bitcoin, as an example.
00:14:54.580You know, I think we're we're Pierre's message really resonates with me is that a lot of this comes down to individual choice.
00:15:00.320You know, what what national currencies represent effectively is a monopoly on how we how we decide to spend money and how we decide to save money.
00:15:07.280And so you, you know, historically, you've been sort of locked into your national economy from the perspective of like, even if you live in a country where you really don't trust the monetary policy, you have no choice to hold your life savings in that in that reserve currency.
00:15:18.920Your bank accounts will only hold that currency.
00:15:20.940The stores in your local city will only accept that currency.
00:15:23.900And you're sort of trapped if all of a sudden you feel like your government is going in a direction that you disagree with.
00:15:28.500There's not a very easy path to call it exit your national economy.
00:15:31.840Right. I think Bitcoin definitely and some of these other cryptocurrency experiments that are that are popping up, they represent a potential choice for customers.
00:15:41.660It doesn't mean that they they automatically go and replace our dependence on a Canadian dollar.
00:15:46.340But to your point earlier, I think it's a very reasonable thing to say that people's portfolios could have some exposure to this space.
00:15:52.380I think that exposure should should should should match the risk profile.
00:15:56.460Right. So the risk profile of this industry is still quite high.
00:15:58.740You know, so maybe that means that people hold one percent of their assets in Bitcoin.
00:16:03.300You know, nobody's suggesting that you go put one hundred percent of your assets into this volatile asset class, but it will continue to evolve and continue to grow and continue to represent a larger and larger percentage of the global economy.
00:16:13.320And I fundamentally believe that's true. It's not a matter of if, but when.
00:16:17.220And these little moments of volatility that we're experiencing.
00:16:19.500I mean, the best thing that I like to do is I sort of like to say to people, zoom out, you know, on a month to month basis, it might look very volatile.
00:16:24.980But if you look at a trajectory, if you look at a trend line that sort of averages out prices over a two year historic trend line, it's it's been a very, very good, well performing asset over its life.
00:16:35.380You know, it's maybe a 13 year old asset or something around there.
00:16:38.320And, you know, two years out, if you average out the price movements over two year periods, it is consistently performed.
00:16:44.620And this is why less than five percent of the world actually owns Bitcoin.
00:16:48.280I tell people who have a better understanding of sort of how gold fits into the global economy.
00:16:52.840Like, imagine if the world was just first discovering gold.
00:16:55.920You know, what would be the reaction to people if they started realizing that there's this asset that people care about?
00:17:01.620We'd see huge volatility in gold markets.
00:17:03.420The only reason we don't is because gold has sort of established itself as a normal asset over hundreds and hundreds of years.
00:17:09.100Bitcoin is just on its way up towards, you know, a similar status, I would say.
00:17:13.040And, you know, my big bet in this space that I've been very bullish on for a long time is that Bitcoin will probably overtake the markets for gold in the next five to 10 years and could become a new gold standard like asset.
00:17:24.400That doesn't mean that national governments are going to flee to Bitcoin.
00:17:27.220I think there is a need to have your own monetary policy in your country, but there's also a need to constrain government's ability to just spend recklessly and print money recklessly.
00:17:35.020And hopefully this introduces a balance.
00:17:38.060Well, and it's interesting just historically, whenever there's a recession, I don't know if we're in a recession or we're heading.
00:17:42.980Towards a recession, it seems like that's the direction we're going.
00:17:46.340It seems like there's always a lot of panic and people sell, which is the worst idea when an asset goes down, whether it's a stock market or Bitcoin.
00:17:52.800Like, don't sell, hold and see what happens.
00:17:55.740That's sort of the advice that I seem to think is the best from financial advisors I listen to and talk to.
00:18:01.640I want to touch on this idea of the difference between Bitcoin and a central bank digital currency.
00:18:08.780You tweeted in response to Pierre Paliev, if Bitcoin represents monetary freedom, the central bank digital currency represents monetary surveillance and control.
00:18:18.880So, Matt, what is the risk of a Bank of Canada creating its own competing digital currency?
00:18:23.640I think there's probably two big themes here.
00:18:27.660One is more a theme of just like modernizing and bringing technology into our monetary system, which I think, generally speaking, we should all be in favor of.
00:18:35.320A lot of the rails and payment systems that we rely on as a country are quite antiquated.
00:18:39.640You know, they were built decades and decades ago, and they lead to a lot of inefficiencies in our banking system.
00:18:45.600This is what you experience as a consumer if you want to transfer money to somebody else's account and there's a two day delay or anything along those lines sort of represents these inefficiencies that still exist in our banking system.
00:18:56.400So, I think if the conversation is, should we be modernizing and bringing technology into our monetary system, then I think, you know, we should all be encouraging of that.
00:19:05.740I think the risk is that what digital currencies represent is effectively a new vehicle to replace cash.
00:19:11.700And what cash is, fundamentally, is an anonymous way to transact.
00:19:15.920And I think it's extremely important in a country that sort of prioritizes freedom that we maintain the ability for our citizens to transact anonymously.
00:19:28.080I mean, you can imagine, you know, the dystopian view of every time you go buy a pack of cigarettes, your insurance company finds out about it and your premiums go up because you're now you represent a higher health risk or whatever.
00:19:39.900And, you know, probably more recent examples around what happened with the trucker convoys in Ottawa and across the country over the last couple of months, the ability for governments to sort of step in and freeze bank accounts and sort of interfere with what is two, you know, adults wanting to transact with each other in what ended up being lawful, you know, in lawful circumstances.
00:20:04.580And so I think what I worry about is that governments will not stop at modernizing and using technology to make our systems more efficient.
00:20:14.180They will realize that this technology provides them new tools and new levers that they haven't previously had.
00:20:18.640The government today cannot theoretically freeze a hundred dollar bill sitting in your wallet.
00:20:23.260But if it's a digital hundred dollar bill that they've issued to you, then all of a sudden they can theoretically freeze it.
00:20:27.860Sarah, this move away from cash towards digital cash effectively, controlled and managed by a central bank, but with significant influence from a government, I think it should be cause for skepticism.
00:20:41.100I think there are ways to have technology without censorship.
00:20:44.980I think it probably needs to be something that gets discussed in terms of policy and legislation, where we think about this very carefully before we rush to implement anything.
00:20:55.040I mean, the best anecdote I can sort of say around why I'm cautious about this is that the first government to do this at scale in the world is the Bank of China.
00:21:04.600So you ask yourself why the Bank of China rushed down the path of building a central currency.
00:21:08.200It wasn't to provide more freedom to their people.
00:21:10.800It was to provide, it was to create more capital controls and to be able to effectively observe in real time what's happening in the economy from people sending money to each other on their cell phones and peer-to-peer payments,
00:21:21.500people buying groceries at the grocery store, that control, we should be very careful before we just hand it over blindly to our government in the name of efficiency.
00:21:31.860Bitcoin, as an example on the other end of the spectrum, is again, more of a representation of something analogous to gold,
00:21:40.360but with easier ability to transfer it and send it to each other because you don't have to carry around heavy gold bricks in your wallet.
00:21:45.840A government could not change the supply of gold.
00:21:49.580They could not decide that the gold you own in your home safe is no longer valid.
00:21:55.300So it has characteristics that keep it valuable, irrespective of the government of the day.
00:22:00.900And I think that it's important that we have that option in the world.
00:22:06.060So I don't think it's a one or the other.
00:22:07.580I think if we're going to go down the path of digitizing our monetary systems, we need to be very, very thoughtful before we rush down that path.
00:22:15.220Well, I'm glad you brought up the trucker convoy and the seizing of bank accounts because that was probably one of the most terrifying things that has happened so far this year, so far in this administration.
00:22:25.060And I think it really raised a lot of concerns, not just in conservative circles in Canada, but in technology circles.
00:22:31.740And people all over the world were sort of like, OK, this could be a potential roadmap for authoritarian and totalitarian regimes.
00:22:39.320One of the things that Finance Minister Chrystia Freeland said was that they were also going to be cracking down on Bitcoin and Ethereum and NFTs and these other sort of decentralized modes.
00:22:50.580Do you think that the Canadian government has that power?
00:22:54.040Do you think that they will be able to step in and stop those kinds of transactions?
00:22:58.440Because isn't the whole purpose of decentralized not giving the government control?
00:23:02.860So what did you make of Chrystia Freeland's comments about that?
00:23:06.300Yeah, I mean, I think before I answer that, I'll say that anybody should be concerned about what happened at the trucker convoy, not simply whether or not you agreed with that group and that protest and whether you support the current government or not.
00:23:18.500I think the idea that any government in power, whether it be liberal, conservative, NDP, whatever, has the authority and the levers to silence their critics and their opponents.
00:23:31.540If it were a conservative government and this were a protest on a progressive issue against, let's say Stephen Harper was still in office, you wouldn't want Stephen Harper to have the ability to do what Justin Trudeau did during that time.
00:23:46.060So I think we really need to approach these things with a nonpartisan lens, that this is just a lever of control, that if we hand this to government, it is impossible to pull it back.
00:23:55.220And we need to be very, very careful about that. And I think, you know, some people will sort of speak to this being, you know, a step towards conspiracy theories, but it's just, you know, once you hand the lever over, you're never getting it back.
00:24:07.080And so as it relates to Chrystia Freeland's comments, I mean, I do think they're concerning.
00:24:11.140I think there's still highlights in my mind that there's a giant misunderstanding around what this technology is and how it works and what it represents.
00:24:17.640It's even the language being used, not only by Chrystia Freeland, but also by some candidates in the conservative race today.
00:24:23.380Elizabeth Luce would be a good example. As they speak about it and they have a choice of words when they're describing it, you can tell that they have a very significant lack of understanding.
00:24:32.620You know, it is a little bit contradictory what Chrystia Freeland is suggesting, but the government does have the ability to make this industry suffer through frictions that it otherwise wouldn't have to suffer through.
00:24:44.500I mean, there are regulatory boundaries around this industry. If you want to be able to interact with a Bitcoin exchange and connect your bank account or open an account with, you know, most of these exchanges in the Canadian context have something analogous to sort of know your client and anti-money laundering process that is regulated by either provincial or federal government regulators, depending on context.
00:25:05.300The Ontario Securities Commission and its sort of counterparts across the country are quite heavily involved in this space.
00:25:09.420The government can make this industry's life more difficult. It cannot wish away the existence of this industry.
00:25:17.200And so I think where we run a risk as a country is if we tighten our grip too much, we're effectively pushing people to countries that are more open-minded and welcoming to the innovation that's happening in this space.
00:25:27.840And over the long term, Canada will just be on the losing side of that bet.
00:25:33.400And, you know, this innovation is happening. We've already seen flights of capital, flights of talent to countries that have been more receptive and open-minded.
00:25:41.300And I think there is a way to balance an openness to innovation with some protections and regulations and sort of some baseline rules that the industry should be expected to adhere to.
00:25:53.400But to try to pretend that you can sort of put the genie back in the bottle, I think, is naive and is going to lead to some really bad policy decisions.
00:26:01.760Well, I'm glad you mentioned that. So I think, you know, my husband and I lived in the Silicon Valley for a few years.
00:26:08.040And one of the things I was sort of struck by was how many Canadians there were down there.
00:26:12.160There's Canadians in every company. Someone told me there's 100,000 Canadians that live just in the Bay Area.
00:26:16.880And there were a lot of Canadian events. And to me, it almost struck me as a little sad that so many Canadians leave Canada to go to the Silicon Valley.
00:26:25.100And I know this phenomenon happens, you know, in Hollywood and music and in finance, like in New York is also full of Canadians working on Wall Street.
00:26:32.980But, you know, I wish Canada did more to retain that talent and to promote at home.
00:26:39.340You wrote a great piece over in the Hub where you talked about Canada needs a new infectious variant of entrepreneurship.
00:26:46.300So I'm wondering, just a final question for you here. What can Canada do to keep more entrepreneurs, to attract more entrepreneurs, to encourage more Canadians to become entrepreneurs?
00:26:59.040Like what is Canada doing wrong and how can we create a better environment to keep these kind of tech people that tend to leave and go, you know, create businesses and make their millions elsewhere?
00:27:08.740Yeah, I think without getting into sort of like policy prescriptions, you know, Christopher Phelan's comments on Bitcoin is a good example in my mind.
00:27:16.080Like what exists in Silicon Valley that doesn't exist in many other places in the world is an openness to sort of the crazy idea.
00:27:24.340The person who's sitting in the coffee shop talking about something that in most contexts, people would roll their eyes at this person and say, listen to that crazy person talking about this idea.
00:27:32.940In Silicon Valley, that's the norm, right?
00:27:34.420Everybody is expected to be thinking outside of the box, is expected to be talking about ideas that are so farfetched today, but ultimately lead to the big breakthroughs and innovations that come to become normal 10 years later, 20 years later, right?
00:27:48.360And whether that's the internet in the 1980s and 1990s, whether that's cryptocurrencies and Bitcoin, you know, in the last decade, you know, imagine listening to the person who was going to describe the Airbnb business to you before Airbnb became normal.
00:28:01.760I mean, in Canada, we would have sort of laughed that person out of the room.
00:28:05.440In Silicon Valley, that was an opportunity to bet on a contrarian idea.
00:28:10.260I think we are, there's a cultural gap that, you know, we can solve for by effectively encouraging more people that think this way to congregate, right?
00:28:20.780Like there's a concentration of people like this.
00:28:23.400There's a density of outside of the box thinkers in Silicon Valley.
00:28:26.720That means that the moment you say a crazy idea, you're not automatically discouraged.
00:28:31.360You're sort of, people are saying, oh, no way.
00:28:34.660Like, and it sort of pushes you down that path as opposed to pushing you to sort of like reconsidering your crazy idea and going for something maybe a little bit more reasonable and tame.
00:28:42.860The best businesses of the last, you know, 20 years were not reasonable in their ambitions.
00:28:47.100They were very crazy ideas in their time.
00:28:49.680And I think as a country, we need to be much more open to things that we don't understand.
00:28:55.580We need to give the default assumption to entrepreneurs that what they're talking about and what they're working on is valid and worth pursuing.
00:29:04.340And, you know, all this to say that most entrepreneurs fail.
00:29:07.380Most business ideas turn out to not be valid or not be successful.
00:29:11.180But it's in the process of allowing sort of a thousand experiments to happen that one really world-changing breakthrough sort of pops through.
00:29:19.060But if you're squashing these ideas before they have a chance to blossom, then that'll never happen.
00:29:23.480And so, you know, the government tends to approach this more from a perspective, like, how can we throw money at, you know, more government-funded incubators and innovation programs and super clusters?
00:29:32.720But ultimately, it doesn't change this, like, you know, are we receptive to new ideas?
00:29:37.880Are we receptive to people that are going to go against the grain to create sort of new norms in the future?
00:29:44.620Well, if anything, it sort of bogs down entrepreneurs because they end up having to fill out government forms to try to apply for certain innovation grants.
00:29:52.000And it doesn't really lead them in the direction of true entrepreneurship.
00:29:56.500Well, Matt, we really appreciate your time.
00:29:57.820Thank you so much for joining us on the show and giving the great explanations that you did.
00:30:01.820And I love your sort of optimistic entrepreneurship spirit.
00:30:06.060I hope that that spreads and that there's much, much more of that in Canada.
00:30:11.040I really appreciate you coming on the show today.