When the Ontario Teachers’ Pension Plan (OTPP) and Caisse de dépôt et placement du Québec (CDPQ) wrote down their multimillion-dollar stakes in the failed FTX exchange in 2022 (1), it marked a turning point in Canadian institutional investing (2).

For most pension executives, the message was clear: Stay far away from crypto. Yet three years later, the tone is shifting. The world’s largest institutional investors — from BlackRock to Singapore’s GIC — are increasing exposure to tokenized assets and digital infrastructure. And quietly, Canada’s pension giants are watching again (3).

After years of skepticism, the conversation inside boardrooms has evolved from “should we?” to “how can we — safely?”

Global Momentum
Institutional adoption of digital assets is accelerating. According to The Crypto Wealth Report 2025, global crypto wealth has surged to US$3.3 trillion, with 590 million people now holding some form of cryptocurrency. What began as a fringe investment class is now reshaping global finance.

Head of Research at Bitcoin Suisse, Dominic Weibel, and contributor to the report, wrote that “digital assets are entering the institutional era.” That means not just trading tokens, but building infrastructure — custody, compliance, and tokenized capital markets — that resemble traditional finance (4).

The Crypto Banking Report 2025 underscores this trend, describing how blockchain rails now support tokenized real estate, private credit, and bond issuances for institutional investors (5).

The report cites the Bullish exchange’s 2025 IPO, which settled US$1.15 billion in stablecoins — the first major public offering to use blockchain settlement at scale. In other words, the world’s financial plumbing is being rebuilt — and traditional asset managers are already plugged in.

Canadian caution and curiosity
For now, Canada’s pension funds are taking a slower path — one focused on infrastructure rather than speculation.

For instance, the CDPQ, which lost roughly CAD $200 million in FTX, has publicly committed to learning from the collapse by investing in fintechs that build custody and compliance tools, not unregulated exchanges. The shift reflects a broader institutional view that the real opportunity lies in blockchain infrastructure, not the volatile tokens themselves.

Mike Foy, CFO of AMINA Bank, captures this sentiment in Crypto Banking 2025 (6): “It’s not about chasing a trend. It’s about ensuring that wealth strategies evolve with the infrastructure powering tomorrow’s financial systems.”

Across Canada, pension executives are commissioning internal studies on blockchain’s potential to improve efficiency in settlement, verification, and recordkeeping. Several are also monitoring pilot projects by European and Middle Eastern sovereign funds that use tokenized assets to reduce transaction costs (7). For Canada’s conservative pension culture — built on diversification, governance, and risk control — this represents a quiet but meaningful shift: From outright avoidance to cautious exploration.

Risk vs. return
Investors shouldn’t be fooled: the case for reconsidering crypto isn’t driven by hype; it’s driven by math.

In the decade since Bitcoin’s inception, correlations between digital assets and traditional equities have fluctuated dramatically. During the 2022/2023 downturn, crypto moved almost in lockstep with tech stocks. But in the past year, as institutional interest has grown and decentralized finance (DeFi) has stabilized, correlations have weakened, opening the door to potential diversification benefits.

In the Henley & Partner’s report, author Mike Foy describes a US$2-trillion “bot economy” — a global system of algorithmic agents managing digital assets autonomously. That level of liquidity and automation, paradoxically, may be making digital markets more efficient — and less correlated to single sectors (8).

At the same time, the Bank of Canada continues to monitor crypto’s impact on financial stability. While still cautious, the Bank’s researchers acknowledge that tokenization could “improve liquidity, transparency, and efficiency in private markets” — benefits that align directly with pension fund mandates.

Policy and regulation: A green light on the horizon
With the rise in importance of crypto comes a necessity to consider the asset, yet, no pension chief investment officer (CIO) is going to risk billions without a regulatory safety net. That safety net is slowly taking shape.

The Office of the Superintendent of Financial Institutions (OSFI) has begun outlining guidance for federally regulated institutions on crypto exposure and custody requirements (9). While these early frameworks are conservative, they provide clarity where none existed just two years ago.

The Digital Offshore Report 2025 (10) notes that jurisdictions such as Switzerland, the UAE, and the EU have raced ahead with “crypto-friendly legislation that prizes clarity over secrecy.” Canada’s regulators, by contrast, have chosen prudence — but that prudence could pay off if it results in more credible, enforceable rules.

Dominic Volek, group head of private clients at Henley & Partners, describes this global competition as “a shift from opacity to transparency — from secrecy jurisdictions to compliant digital hubs (11).”

That shift aligns neatly with the risk culture of Canada’s largest pensions, which collectively manage over C$2.4 trillion. When transparency improves and institutional-grade custody solutions emerge, these funds may once again step toward digital assets — this time on their own terms.

Tokenization: The Trojan Horse for adoption
If direct crypto exposure remains off the table for most pension funds, tokenization could become their on-ramp. Tokenization — the conversion of real-world assets like bonds or real estate into blockchain-based tokens — is attracting mainstream attention because it combines crypto’s efficiency with traditional finance’s stability.

In Crypto Banking 2025, Henley’s analysts describe how tokenized private credit and real estate are becoming “the new rails of wealth,” offering faster settlement, fractional ownership, and real-time tracking (12).

For pensions facing low yields and liquidity bottlenecks in private markets, tokenization could unlock faster valuations and lower operational costs — without the price volatility of crypto trading.

The long game
Canada’s pension plans have long been the envy of the world for their discipline and prudence. They invest for generations, not years. That long-term view is exactly why these institutions can’t ignore the blockchain economy forever.

Dr. Niklas Schmidt’s analysis in The AI Crypto Boom (13) captures the magnitude of what’s coming: “We are witnessing a new economic paradigm where digital actors can own assets, make decisions, and create value independently.”

If digital actors can hold and transfer value independently, then asset managers — including pension funds — must adapt to a world where the next trillion-dollar market might exist entirely on-chain.

Bottom line
Canada’s pension giants won’t lead the charge into crypto — and they shouldn’t. Their caution is what protects retirees’ wealth.

But as regulatory clarity improves and tokenization matures, the very traits that make them conservative may also make them credible first movers.

When CPP Investments or OTPP or any other pension investor eventually decide to re-enter the digital asset space — not through exchanges, but through secure, transparent blockchain infrastructure — it won’t just mark their return. It will legitimize crypto as an institutional asset class.

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