Canada brings in bitcoin regulations
24 June 2014 | 10859 views | 2
Canada's parliament has passed a bill bringing in comprehensive regulation of bitcoin and other digital currencies.
The new law means that firms dealing in virtual currencies will be classified as 'money services businesses' and therefore subject to record keeping, verification procedures, suspicious transaction reporting and registration requirements.
Bitcoin dealers will be required to register with Canada's Financial Transactions and Reports Analysis Centre (Fintrac) and roll out anti-money laundering compliance measures. Banks will be banned from offering services to firms that do not register with Fintrac.
The new legislation covers not only Canadian virtual currency dealers, such as exchange operators and ATM networks, but also bitcoin companies from outside of the country that serve Canadians.
Christine Duhaime, senior financial crime advisor at consultancy MNP, says: "Part of the concern with such laws is whether they strike a balance between combating financial crime and supporting innovative technology development. The concern is that venture capital for Bitcoin start-ups may dry up if legislative obligations prove to be too onerous or expensive."
Meanwhile, California lawmakers have also been looking into bitcoin, passing a bill to make using the currency easier. The bill would repeal a law prohibiting commerce using anything but US currency. It now goes to Governor Jerry Brown, who will approve or veto it.