Smartphone with web site of US crypto firm World Liberty Monetary Inc. on display
A quiet revolution is underway amongst the world’s rich. In line with The Crypto Wealth Report 2025 by Henley & Companions, nearly 1 / 4 of one million individuals throughout the globe now maintain greater than US$1 million in crypto belongings (1). Much more astonishing is how briskly that wealth grew — with a 40% enhance in simply 12 months.
Whereas the method these “crypto millionaires” acquired their wealth makes for fascinating studying for any traders, it is what they’re doing with that cash that may have the most influence.
Turns out these newly minted crypto millionaires aren’t simply diversifiying their portfolio, they’re relocating their wealth. Turns out the most popular places aren’t the celebrity-filled — or financially-rich — places we’re accustomed to studying about. For a lot of, crypto millionaires the vacation spot of selection isn’t New York, London and even Bay Road. It’s Dubai in the United Arab Emirate (UAE), Lisbon in Portugal or Valletta in Malta. The flight of crypto millionnaires consists of rich Canadians trying to the Persian Gulf or southern Europe to park their digital riches.
Given the digital nature of this asset, the query stays: What would immediate this flight of crypto wealth? The reply lies in an idea that’s reshaping world wealth administration: Sovereign arbitrage — the strategic choice of nations primarily based on how they tax, regulate and welcome digital belongings.
In line with knowledge launched by Henley & Companions, a world chief in residence and citizenship planning, roughly US$14.4 trillion in wealth crossed borders final 12 months. However it’s not simply the migration of this asset, however the proven fact that this capital is shifting to jurisdictions the place digital belongings are clearly outlined and frivolously taxed. Meaning conventional offshore centres like Switzerland and the Cayman Islands — offshore havens that when competed on secrecy — are actually dropping prominance to newer rivals, comparable to Portugal, Malta and the UAE, who’re extra aggressive on the subject of digital transparency and innovation.
In line with Henley & Companions, Portugal has turn out to be a poster baby for progressive crypto taxation (2). As of 2025, long-term crypto holdings — belongings held for greater than one year — are totally exempt from capital beneficial properties tax. Non-fungible tokens (NFTs) and crypto-to-crypto transactions additionally get pleasure from preferential remedy below the country’s evolving digital-asset framework.
The United Arab Emirates, notably Dubai, has doubled down on its ambition to be a world crypto hub. The UAE’s Digital Property Regulatory Authority (VARA) oversees a complete licensing framework whereas sustaining 0% tax on capital beneficial properties and wage earnings — a mixture few different jurisdictions can match.
Malta, usually dubbed “Blockchain Island” (3), stays a trailblazer in European crypto regulation. It was amongst the first European Union (EU) nations to problem complete crypto-licensing frameworks and Malta continues to draw digital entrepreneurs via its investment migration packages (which give residency rights alongside regulatory certainty).
Group Head of Non-public Purchasers at Henley & Companions, Dominic Volek, notes that this competitors represents “a shift from tax secrecy to regulatory readability” (4). In different phrases, crypto wealth is now chasing certainty, not concealment.
Whereas Canada ranks eighth globally on the Henley Crypto Adoption Index 2025 (5), behind Singapore, Hong Kong, the U.S. and Switzerland, its coverage stance stays cautious.
Below present CRA guidelines, cryptocurrencies are taxed as commodities, not currencies. Beneficial properties from buying and selling are thought of enterprise revenue if the investor trades incessantly, whereas occasional traders pay capital beneficial properties tax. However ambiguity persists round newer areas like staking, mining and decentralized finance (DeFi) yields.
As an OECD report states (6): “Tax coverage can contribute to bettering transparency and certainty in the digital foreign money area. Clear tax guidelines implies that will probably be simpler to encourage and monitorcompliance and reporting, permitting nations to entry extra info on transactions and serving to them detect unlawful actions. Adopting an environment friendly and enough taxation framework additionally helps to enhance certainty and minimise prices for traders, people and companies by acknowledging their actions and establishing clear tax liabilities and therapies.”
Uncertainty has actual penalties. With no clear framework for AI-driven buying and selling bots, tokenized actual property or yield-farming returns, Canada dangers dropping each talent and taxable revenue to friendlier jurisdictions. On the flipside, there’s additionally a danger of larger monetary losses — each from institutional in addition to Essential Road cash. As the Financial institution of Canada recognized in a 2022 report (7): “Cryptoasset markets proceed to evolve and develop quickly, and worth volatility stays excessive. Whereas they don’t but pose a systemic danger to the Canadian monetary system, the lack of a regulatory framework means they function with out many of the safeguards that exist in the conventional monetary system. This exposes traders to dangers comparable to massive and sudden monetary losses resulting from fraud, worth declines or a run on stablecoins.”
The Digital Offshore report (8) highlights how this ambiguity has accelerated residency-by-investment (RBI) functions from digital entrepreneurs in search of “jurisdictional optionality.” These packages, provided by nations comparable to the UAE, Malta, and Antigua, permit traders to safe authorized residency in alternate for investments in property, bonds, or nationwide improvement funds. Whereas the motivations range, normally it boils all the way down to:
Entry to digital banking infrastructure that may accommodate crypto earnings
Avoiding double taxation
Minimizing reporting obligations below OECD’s 2027 Crypto-Asset Reporting Framework (CARF), which would require world exchanges to share consumer knowledge with tax authorities
And this nice migration of crypto belongings will solely develop over time on condition that “the identical instruments multinational companies used to shift earnings throughout borders are actually obtainable to anybody with an web connection (9).” This democratization of offshore technique has blurred the line between particular person investor and world enterprise. For Canada’s tax system — constructed round clear definitions of residence and supply — it’s presents one more problem however this one has no precedent.
Given the considerations raised about crypto — the cash laundering and the dangers of dropping an under-regulated asset — the query Canada should reply is whether or not to compete on this world race or stand aside.
The choice of inaction can be expensive, specialists warn. Crypto’s borderless nature means capital can exit the country sooner than regulators can adapt. The Crypto Banking Report 2025 describes a world “inflection level in wealth administration,” the place conventional banks and governments danger obsolescence in the event that they fail to adapt to blockchain-based finance (10).
Different nations have already drawn their line in the sand. The GENIUS Act and the CLARITY Act in the U.S. have established new requirements for digital-asset oversight and institutional participation, serving to entice each capital and innovation.
Canada’s problem is discovering stability. Simplifying its tax code for digital belongings may enhance competitiveness but additionally invite volatility. The CRA and Division of Finance should weigh the advantages of innovation in opposition to the danger of eroding the tax base. As the Henley & Companions report warns: Clamp down too arduous, and traders will merely transfer elsewhere.
The shift to borderless finance isn’t theoretical — it’s right here. Bitcoin and stablecoins will be held wherever, transferred immediately, and accessed globally with a 12-word password. The Henley report (11) captures this succinctly: “A Bitcoin pockets exists concurrently all over the place and nowhere, a Schrödinger’s asset that solely materializes when its proprietor chooses to transform it.”
That makes “location-based” taxation — a cornerstone of the fashionable fiscal system — deeply outdated. For governments like Canada’s, it implies that wealth is now a shifting goal. For traders, it means unprecedented freedom and duty.
In the event you’re dabbling in crypto, keep compliant and knowledgeable. Report your trades, staking revenue and mining earnings to the Canada Income Company (CRA). Preserve meticulous information. And remember that overseas exchanges could quickly share transaction knowledge robotically below the OECD’s CARF system.
But additionally, perceive your choices. Residency and citizenship-by-investment packages — as soon as seen as area of interest — are more and more instruments for diversifying geopolitical and tax publicity.
Canada has a possibility to steer by instance. It could develop clear, innovation-friendly tax pointers for digital belongings, reasonably than forcing entrepreneurs to look overseas. Encouraging blockchain innovation inside a regulated framework may entice investment, retain talent, and stop capital flight.
As Mike Foy wrote in Crypto Banking 2025 (12), “Lacking this momentum may imply lacking out on the infrastructure that may safe, develop, and switch wealth going ahead.”
Crypto has made geography non-compulsory — and capital cell. As nations from Lisbon to Dubai open their doorways to digital wealth, Canada faces a pivotal selection: Modernize or marginalize.
The Digital Offshore period isn’t ready for anybody. Traders have already moved. Now, it’s as much as Canada’s policymakers to determine whether or not they wish to compete — or watch the wealth movement away.
We rely solely on vetted sources and credible third-party reporting. For particulars, see our editorial ethics and guidelines.
Henley & Companions: The Crypto Wealth Report 2025 (1, 2, 3, 9, 10, 11); Henley & Companions: The Digital Offshore and the Future of Cross-Border Wealth (4, 8); Henley & Companions: The Henley Crypto Adoption Index 2025 (5); OECD: Taxing Digital Currencies (6); Financial institution of Canada (7); Henley & Companions: Crypto Banking: The New Extremely-Excessive-Internet-Value Infrastructure (12)
This text supplies info solely and shouldn’t be construed as recommendation. It is supplied with out guarantee of any sort.
