Canadian Pension Funds Diversify Into Blockchain Infrastructure Companies

For the past year or so, there has been a quiet discussion about blockchain taking place in a conference room somewhere in the offices of a major Canadian pension fund. This is one of those high-floor, glass-walled spaces in downtown Toronto or Montreal. The tone is not the same as it was previously. No one is discussing token exposure, yield accounts, or wagering on the next Celsius. The questions being asked in 2025 and 2026 are more structural, cautious, and intriguing because they are both: which businesses are constructing the digital finance infrastructure, what constitutes a responsible allocation to that category, and how can we explain this to an investment committee that still remembers FTX?

For these organizations, the memory of FTX is not abstract. Following the collapse of the exchange, the Ontario Teachers’ Pension Plan wrote down $95 million in November 2022. About CAD $200 million was lost by the Caisse de Ré Québec et placement du Québec. In December 2022, CPP Investments, the biggest pension fund in Canada, discreetly stopped researching cryptocurrency investment opportunities. There are no references to “crypto,” “cryptocurrency,” or “blockchain” in the 2024 CPP annual report. Millions of Canadians’ retirement funds are managed by these organizations, so the political and reputational fallout from another high-profile cryptocurrency loss would be substantial. Thus, the retreat made sense. Now, the question is whether the next steps make sense as well.

The distinction between infrastructure investment and speculative token exposure, which the more astute institutional investors have been making for some time, is gradually coming to light. According to Forrester Research, blockchain technology is not the same as cryptocurrencies. Walmart’s supply chain verification, Maersk’s cargo management since 2017, Burberry and Louis Vuitton’s counterfeit protection, and a growing number of financial infrastructure products that are unrelated to Bitcoin’s daily fluctuations are all supported by this technology. Institutions are focusing on the final category, which includes tokenized bond and credit markets, digital asset custody platforms, compliance tools, and settlement infrastructure.

The post-FTX positioning of CDPQ is instructive. The Quebec fund has openly expressed interest in investing in fintechs that develop the custody and compliance layer of digital finance—the picks-and-shovels play, to use industry jargon—instead of pulling out of the market completely. Regardless of what happens to speculative cryptocurrency prices, the markets for tokenized real estate, private credit, and institutional-grade digital asset management are real and expanding. The rails that those markets will run on must be constructed. that someone needs money. If the governance is appropriate and there is little to no token exposure, CDPQ is willing to supply a portion of it.

A version of this argument has been presented to Canadian pension professionals by Lawrence Newhook, president and CIO at Alpha Innovations, a former trader at Canadian banks who later worked at OMERS. Institutional investors shouldn’t directly own cryptocurrency assets, in his opinion. He believes that investing in the blockchain infrastructure space is feasible, but only in certain ways. Usually, small, private businesses are involved.

Exchanges don’t list them. The only realistic way to get started is through co-investment through venture capital funds; Newhook advises diversifying across several smaller VC funds instead of focusing on just one. Before committing to a second or third fund, he advises concentrating on VC partners who have already managed a successful fund—managers with a verifiable track record, not just a promising deck. “I would never invest in a first-time fund,” he has stated. “You could never justify it to your investment committee.”

It is important to exercise caution. The investment committees and beneficiary obligations of Canadian pension funds differ from those of private family offices or sovereign wealth funds with distinct mandates. Every decision is influenced by the genuine pressure of governance. As Newhook notes, a $50 million commitment to a blockchain infrastructure venture capital fund represents a sizeable portion of a $100 or $200 million fund; this creates concentration risk that must be managed consciously rather than accidentally.

Beneath all of this, the global context is changing. Global cryptocurrency wealth hit $3.3 trillion in 2025. The Bullish exchange successfully completed an IPO that used blockchain rails to settle $1.15 billion in stablecoins, making it the first significant public offering to do so on a large scale. Tokenized assets and digital infrastructure are becoming more and more important to BlackRock, Singapore’s GIC, and other organizations that function well above Canadian funds on the global asset management hierarchy. There is pressure created by that pattern. Pension fund boards are aware of the direction that the world’s biggest institutional investors are taking.

Whether the current Canadian strategy—measured, infrastructure-focused, VC-mediated—will yield returns that outweigh the complexity is still up for debate. Since the market is still relatively new, the evidence is actually scant. It’s evident that FTX did not teach us to “stay away from blockchain forever.” It was more precise: avoid unregulated transactions that lack disclosure and have opaque balance sheets. Canada’s pension funds are gradually starting to address the infrastructure that underpins digital finance.