Until recently circulation of bitcoin in Canada was not regulated by any particular law. Official legislation only acknowledges notes and coins issued by the Bank of Canada as legal tender, which automatically excludes digital currency. Besides that however there is no formal ban of operations with bitcoin or any other cryptocurrency.
Local initiative
For many years now Canada has had a strong and dedicated bitcoin community. There are local groups of bitcoin enthusiasts in Toronto, Ottawa, Vancouver, Montreal and many other places all over the country. Community meetups and activities are organised on a regular basis. Such organisations as Bitcoin Alliance Canada, Bitcoin Cooperative and the Bitcoin Foundation of Canada have been the main driving forces behind the popularisation of the cryptocurrency in the country.
Due to the involvement of business organisations and individual activists, the country managed to pioneer in many aspects of bitcoin propagation. Thus in July 2013 the Bitcoin Embassy, sponsored by a local estate agent, opened its doors in Montreal, to become a “gateway into the bitcoin ecosystem” for developers, investors, entrepreneurs and general public. In October of the same year what is considered to be the world’s first bitcoin ATM was installed in a coffee shop in downtown Vancouver.
A growing number of local businesses, services, shops, hotels and freelance specialists now accept payments in BTC. To buy and sell cryptocurrency Canadians have access to world’s most popular exchanges, such as Bitstamp and Kraken. In August 2015 another international trading platform Coinbase expanded its services to include Canada. But along with this there are a number of native exchanges directly trading BTC for CAD. Among them are Cavirtex, the first Canadian bitcoin market, Quadrigacx, Cointrader, Morrex, and others.
The future of digital currencies and specifically bitcoin was the main focus of Canada’s First Fintech Conference, which took place in Vancouver in June 2015. Another meeting of Canada’s leading bitcoin experts in Toronto, at the Fintech and Innovation conference in September 2015, hosted the country’s first Fintech Awards.
Legal ups and downs
Initially bitcoin regulations in Canada were somewhat a grey area. When after a few years of non-feasance the authorities finally brought digital currencies within the scope of law, their position was regarded by many as being far from 'laissez-faire' and even hostile. First, in 2013 the Revenue Agency of Canada made a statement that all transactions in digital currencies were liable to taxation, as they were considered barter exchange. Even trading bitcoin on exchanges was regarded as a speculative activity and also implied taxes to be paid off.
Next year an amendment was made to the national anti-money laundering and counter-terrorist financing legislation to include virtual currencies. According to the new version of the law, Canadian bitcoin operators became subject to the same rules and regulations as the rest of “money services business” and had to be registered with the Canada’s financial intelligence centre FINTRAC. The latter made them obliged, among other things, to report suspicious activities and disclose identity of their users by request. The move provoked arguments and anxiety among members bitcoin community, who felt the cryptocurrency's basic principles of anonymity and freedom of transactions were under threat.
Finally in June 2015 Canadian parliamentarians said their word in favour of bitcoin. The Senate's Banking, Trade and Commerce committee issued a report on the progress of financial technologies in which it strongly recommended the federal government to adopt a “light touch” approach dealing with cryptocurrencies. The senators pointed out that the blockchain technology, having a vast potential, is still at a "delicate stage" of development and should be protected from any restrictive and stifling regulations.
