Canada’s unbanked are out of time — can blockchain step in before the system fails them
Man withdrawing cash from a cash machine (ATM)
While it may be surprising, but even in a country as financially advanced as Canada, hundreds of thousands of people still lack access to basic banking services.
According to a 2022 Financial Consumer Agency of Canada (FCAC) study (1), roughly 600,000 Canadians are “unbanked,” meaning they have no chequing or savings account. Millions more are “underbanked,” relying on payday lenders, prepaid cards, or money-transfer services that charge steep fees.
For newcomers, low-income workers, and rural or indigenous communities, the barriers can be both financial and geographic. But as digital finance evolves, one question looms larger than ever: could a smartphone and a digital wallet fix that?
At its core, blockchain-based finance (or DeFi, short for decentralized finance) eliminates the need for intermediaries like banks. Using smart contracts — self-executing code on public blockchains — users can send, borrow, lend, or earn interest without ever stepping into a branch.
Crypto banks built on blockchain “offer borderless wealth mobility, programmable finance, and seamless entry into emerging products such as tokenized real estate and private credit,” explains Mike Foy, CFO of Amino Bank (2). Unlike traditional banks, crypto banks operate continuously — 24/7, 365 days a year — without waiting for business hours or borders to open.
This kind of “always-on” infrastructure could be transformative for people who struggle with access to traditional banking. A DeFi wallet doesn’t care about your credit history, immigration status, or postal code. All it requires is an internet connection.
Dr. Niklas J.R.M. Schmidt, a contributor to The AI Crypto Boom report (3), described it as “a new economic reality where AI and digital systems can manage and move value independently.”
That same autonomy — without branches or back offices — could help democratize access to financial tools long reserved for those inside the system.
Canada’s financial system is widely regarded as one of the world’s most stable. But stability can also breed exclusion.
In rural and remote areas, physical bank branches are disappearing faster than ever. Between 2019 and 2024, major banks closed over 400 branches nationwide, leaving smaller towns and northern regions reliant on distant ATMs (automatic teller machines) or digital-only access. For those with unreliable broadband, that’s no access at all.
Indigenous communities face even steeper hurdles. A 2023 Senate report on Indigenous economic participation found that many First Nations residents are “effectively cut off” from basic banking due to a lack of branches, ID verification barriers, and mistrust of institutions (4). For these Canadians, crypto-based solutions — such as digital wallets that can receive remittances or store savings — may offer a bridge.
Dominic Volek of Henley & Partners describes this trend (5): “Cryptocurrency democratizes capabilities once reserved for the ultra-wealthy. The same tools multinational corporations used to shift capital are now available to anyone with an internet connection.”
For rural or marginalized users, that could mean the first true opportunity to store, send, and grow their money—without needing to rely on the big five banks.
The potential isn’t theoretical — it’s already emerging in small but powerful ways. Examples of how crytocurrency is helping remove barriers include:
Lower-cost remittances: For newcomers to Canada sending money home, blockchain transfers can cut costs dramatically. Traditional remittance services can charge 7% to 10% in fees, while crypto remittances can complete transactions for under 1% — and often in minutes. The Crypto Wealth Report 2025 notes that over US$2 trillion in stablecoin activity each month is already handled by AI and automated systems, many facilitating global peer-to-peer payments.
Microloans via blockchain: Emerging fintech firms in Toronto and Vancouver are experimenting with blockchain microloan platforms that let users borrow small amounts against tokenized assets or proof-of-savings, without credit checks.
Crypto savings and investment apps: Several Canadian startups now offer hybrid models—allowing users to earn interest on stablecoins pegged to the Canadian or U.S. dollar. These mimic high-interest savings accounts but operate via blockchain protocols rather than bank-led products.
While none of these systems are regulated at the same level as banks, they demonstrate crypto’s potential to serve segments the traditional system overlooks.
Still, realizing that potential will require more than code. As the Crypto Banking 2025 report emphasizes (6), custody and regulatory safeguards are “critical, particularly for those seeking security with blockchain-based innovations.”
In Canada, this means upgrading both policy and infrastructure. The Bank of Canada has already begun research into a central bank digital currency (CBDC), exploring how a “digital loonie” could improve inclusion and payment efficiency. But progress has been slow, in part due to privacy and governance concerns.
Meanwhile, other countries are moving quickly. The UAE’s Virtual Assets Regulatory Authority (VARA) licensing regime, Europe’s Markets in Crypto-Assets Regulation (MiCA) regulation, and Switzerland’s Financial Market Supervisory Authority (FINMA) framework are already integrating crypto into their mainstream banking systems. Canada, by comparison, still lacks clarity on whether certain DeFi activities — like staking rewards or yield farming — constitute income or capital gains.
As Dominic Weibel wrote in the Crypto Wealth Report 2025 (7), “The new laws of wealth are being written in code.” Canada will need to decide soon whether it wants to help draft those laws—or simply enforce them after the fact.
While DeFi offers freedom, it also carries serious hazards. Price volatility, fraud, and the absence of deposit insurance remain major concerns.
Crypto’s open-access model makes it easier for scams to spread, and market swings can wipe out savings overnight. As Volek cautions in his report (8): poorly designed or overly punitive regulation could backfire, “accelerating the very disintermediation governments seek to prevent.”
The answer isn’t restriction — it’s education. Financial literacy needs to evolve to include digital asset safety, private-key management, and the realities of risk exposure. Without it, the most vulnerable Canadians could become the easiest targets in an unregulated marketplace.
For now, crypto remains a supplement, not a substitute, for traditional banking. But as blockchain systems mature, they could deliver the very things Canada’s big banks have struggled to provide: affordability, accessibility and autonomy.
If properly integrated and regulated, DeFi could one day offer a parallel financial system — one where access isn’t determined by income, location, or institutional trust, but by digital literacy and connectivity.
As observed by Volek (9): “We are at an inflection point in global wealth management. Just as private banking once distinguished wealth from mass banking, crypto banks are now defining the next frontier.”
For Canada’s underserved citizens, that frontier might not be a distant concept. It might be as close as the next app download.
Crypto may never replace banks — but it can fill the gaps they leave behind. If Canada can align its regulation and infrastructure with innovation, blockchain could finally make banking what it should have been all along: borderless, affordable, and inclusive.
Department of Finance Canada (2); Henley & Partners: Crypto Banking: The New Ultra-High-Net-Worth Infrastructure (2, 6); Henley & Partners: Crypto Assets: A Very Short Introduction (3, 7); Improving Financial Literacy in Indigenous Communities (4); Henley & Partners: The Digital Offshore and the Future of Cross-Border Wealth (5, 8, 9)
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
