One of the biggest aspects of any currency involves how it is regulated. With the growth of digital currencies, this topic has been thrust into the spotlight once again. The idea of regulation with respect to digital currencies has been a major focus of debate. While this might not have been a major topic of conversation at the beginning of the birth of cryptocurrencies, many people have since come to realize that this type of currency is here to stay. Therefore, many people are starting to wonder how the regulation of cryptocurrencies is going to play a role in Canada. There are a few important points that everyone should keep in mind.
The regulation of digital currencies has become a hot topic of debate throughout not only the world of digital currencies but also among leaders throughout the world. One of the countries that are at the center of this debate is Canada. Along with the United States, Japan and South Korea, these countries have been among the most prominent users of digital currencies. Therefore, many of these countries are busy trying to formulate a stance when it comes to digital currencies and how they are going to be regulated, should that point become necessary. Of course, the stance these countries are taking is a bit mixed. There are a lot of dissenting opinions when it comes to the regulation of digital currencies.
Recently, there was an interview conducted with CNBC (an American financial network). During this interview, the regulator of the governor of Canada’s central bank compared investing in digital currencies to some form of gambling. He stated that these digital currencies are not actually assets. Instead, they are securities that do not have any intrinsic value. In making this statement, the chief arbiter of the Canadian banking system was stating that any regulation of this currency would be impending in order to protect the consumers as a whole. At the same time, he also said that the idea of a blockchain is also a genius invention and could have a large number of applications. In this manner, it will be interesting to see what happens with regulations, which he states are not intended to stifle innovation and are being put in place to keep people safe.
Even though these comments quickly got the attention of everyone around the world, the Canada Revenue Agency (CRA) has decided to treat digital currencies as a commodity. In this fashion, digital coins are actually legal to be traded; however, they cannot be used as a form of payment. This is a bit different from other countries around the world and has been a source of some confusion when it comes to how these various digital currencies are able to be used. In general, Canada has adopted a stance that digital currencies are not a form of legal tender within its own borders. This includes the country’s internal notes and coins. This is where people are wondering if this is going to change in the future.
Now, Canada was the first country to write some form of law that would pertain to digital currencies in an effort to regulate the transactions that take place throughout the country. With this in mind, any business in Canada that is going to deal with digital currencies has to register with something called FINTRAC, which is the intelligence unit of the country. Furthermore, those businesses will be denied the opportunity to register for banks in Canada unless they follow close anti-money laundering (AML) and compliance measures.
While Canada was the first country to write a law, the regulations surrounding digital currencies in Canada are not national. They are also not overarching. This comes in contrast to some of the other countries in the world that have written bigger laws. Furthermore, Quebec was also the first province in the country to provide permission for an ICO to take place. Therefore, people can see that digital currencies are still an evolving measure in the country and the world as a whole.
Now, at the same time, there are some people who see a problem on the horizon. This means that, as the world of digital currencies continues to grow, there has to be some form of a reasonable regulatory framework in place. Otherwise, investors have the potential to lose their shirts. Many people point to the stock market as an example; however, digital currencies do not have the same level of regulation in place. It will be interesting to see how the country responds.
Now, officials in Canada have already started to pay closer attention to the world of digital currencies. They know that there are impacts that these technologies are going to have on a world that continues to change. At the same time, regulatory officials have already been clear as they pursue companies that are trying to use digital currencies to prey on citizens who might not know any better. This is where the Financial and Consumer Services Commission (FCNB) has started to play a bigger role. They have already taken action against a bank in the world of digital currencies that were offering securities advice despite not registering to play a role in either respect. They even listed the bank and its employees to be fake even as the company decided to go ahead with an ICO. This is only one example of regulatory agencies taking action in the world of digital currencies.
When the complaints started to flow, the securities commission in Ontario started to go into action as well. They began targeting exchanges that might not be adhering to the relevant laws in the world of security and digital currencies. Furthermore, the OSC started to flag token sales with the intention of a better understanding of how criminals might be operating and the risks these posed to people int eh world of digital currencies. The OSC even cited that digital currencies are a major innovation even as they continued to investigate what was going on.
Now, Canada is still open to innovation in the world of digital currencies even though there has been a lot of discussion surrounding how they are going to continue to regulate digital currencies as they continue to evolve. There is even a cryptocurrency exchange in Canada that is adding new coins. This comes in response to similar measures that have been taken by other countries. The goal of Canada is to simply prevent people from getting hurt in the world of digital currencies. There is some that claim that the measures that are taken are going to stifle the innovations of digital currencies; however, there is still a fine line that has to be walked. AML and KYC policies are going to play a critical role in keeping people safe as digital currencies continue to grow.
There is a major concern when it comes to money laundering in the world of digital currencies. For example, the police in the region of Vancouver recently noticed that the filings related to cryptocurrency have more than tripled in back to back years as people are becoming more interested in digital currencies. As interest continues to grow, more and more criminals are going to start to pay attention as well.
While Canada has not been without criticism when it comes to regulations surrounding digital currencies, they are one of the countries that have become most clear. There is a website run by the Canadian government that provides clear and transparent information regarding the obligations people have when it comes to digital currencies within its borders. There are more risks that come with digital currencies when compared to more traditional assets. In this manner, people need to make sure they know what they are doing if they want to trade digital currencies; however, there are also opportunities for tremendous upside with this form of investment.
While Canada does still appear to be a mixed bag when it comes to what they are going to do next, as there is still a lot of debate, this is not a unique problem. There are lots of countries that are still trying to figure out how they are going to address the growth of digital currencies in an effort to keep people safe without stifling innovation in the process. It will be interesting to see what happens next in the world of digital currencies.