With Canada’s policymakers scrambling to regulate the cryptocurrency sector after a year that saw Bitcoin and other digital assets boom, bust and go mainstream, some of Canada’s biggest crypto companies are joining forces in a bid to parlay their newfound riches into influence.

Dapper Labs, Wealthsimple and Bitbuy owner WonderFi are among the founders of the Canadian Web3 Council, a new non-profit member-funded industry association. In a release announcing its launch Tuesday, CW3 said it’s issuing an urgent call to all levels of government to coordinate on a national strategy for cryptocurrency and digital assets.

CW3 co-founder Connor Spelliscy, a crypto researcher and advocate who also co-founded the prominent American industry group the Blockchain Association, said Canada risks losing companies, funding and talent to the U.S. if it doesn’t act decisively.

“Canada could play such a critical role…. I don’t want to see us lose that advantage,” he said. “I want to see us be a leader.”

Motivated by the threat of an aggressive crackdown by the U.S. Securities and Exchange Commission and other regulators, money has poured into crypto lobbying in the U.S.—from both crypto companies and less conventional sources, such as crypto-based decentralized autonomous organizations, or DAOs. The number of crypto lobbyists in the U.S. has nearly tripled and political spending has quadrupled since 2018, according to a report by the consumer-rights think tank Public Citizen.

Coinbase, as well as the prominent venture capital firm a16z, have made their own policy proposals, with the former proposing a special regulator for crypto. Even Canada’s Dapper Labs has joined in, registering to lobby the U.S. government on NFTs.

Crypto-industry associations and lobbyist groups in the U.S. mobilized the resources and passion of the crypto community to push for changes to the massive bipartisan infrastructure bill, an effort that is ongoing. Their lobbying push is set to continue following President Joe Biden’s executive order earlier this month announcing a “whole-of-government approach” to the challenges and opportunities crypto assets present.

Meanwhile, in Canada, securities regulators are one year into an effort to get cryptocurrency-trading platforms that hold assets in custody for their customers to register as investment dealers, a unique approach that has been held up as a potential model for the U.S. While the Ontario Securities Commission has taken the lead on enforcement action, Alberta’s government has been marketing the province as a friendly destination for the crypto industry.

In an interview with The Logic, Bitbuy CEO Michael Arbus said his firm’s experience working with provincial regulators convinced him of the need for an industry association like CW3. In December, Bitbuy became Canada’s first cryptocurrency-trading platform to be registered as both a marketplace and an investment dealer before being acquired by the decentralized-finance company WonderFi in a deal that closed last week.

“Having a national strategy and one group that advocates for an industry that’s perpetually changing, we think, is a great idea,” Arbus said. “It immediately clicked with us.”

The U.S. executive order has some similarities with a private member’s bill that Calgary Conservative MP Michelle Rempel Garner presented in February, which would require the finance minister to create a framework to encourage the growth of crypto assets in Canada, and to do it in consultation with people who have experience in the sector. Jelena Djuric, the other co-founder of CW3, called Rempel Garner’s bill “a very good starting place.” Djuric is also marketing lead at Toronto-based Informal Systems, which does research and development in service of the Cosmos protocol.

The first item on CW3’s to-do list is much less splashy than a national strategy, however. “There’s incredible appetite for something like this in terms of education,” said Djuric.

The jargon used in the cryptocurrency world is famously incomprehensible to outsiders, and the very concept of scarce digital assets with provable ownership is difficult for many to grasp—including the people charged with developing laws and regulations to govern those assets.

In mid-March, a parliamentary committee called on representatives from Canadian crypto companies to testify on the role of cryptocurrencies in fundraising for the convoy protests that snarled Ottawa for weeks. There, members of Parliament asked rudimentary questions about the difference between a bank account and a crypto wallet, and expressed confusion about what laws and regulations applied to the sector. “To me, there’s an awful lot of grey area here, and maybe I just don’t understand it,” P.E.I. Liberal MP Heath MacDonald said at the committee meeting. He went on to ask if there was an industry association he could consult for help.

Given that the global cryptocurrency market is worth over US$2 trillion and 14 per cent of Canadians reported owning crypto assets in a June 2021 survey, that lack of understanding is a problem—one that CW3 aims to solve. “I appreciate the challenge that policymakers and regulators in Canada face right now. It’s not easy to wrap your head around, even if you’re in this industry full time,” Spelliscy said.

Rick Claypool, a research director for Public Citizen who wrote the report on the U.S. crypto lobby’s explosive growth, said there’s nothing wrong with businesses helping lawmakers understand the sector as long as lawmakers balance it with other perspectives.

“If you’re making policy decisions, you can’t solely rely on self-interested businesses to provide the education,” he said. “The business case can be made so loudly, and so flush with funding, it drowns out the competing voices.”

The crypto sector has a reputation for being hostile to regulation, but Spelliscy said that is not the business case CW3 will be making. On the contrary, he said he thinks the crypto sector and governments need to work together to thrive.

“There’s a narrative that previously existed in the crypto world: ‘We can just do what we want. This is a global jurisdiction.’ I’m not a strong believer in that,” he said. “I very much believe that if the crypto industry doesn’t receive support from government, the industry ceases to exist.”