Canada has introduced a new set of legislation intended to regulate and oversee Bitcoin and other digital currencies, becoming one of the first countries to implement a comprehensive rule to supervise digital currencies.
As per the new law, the firms involved in virtual currencies business will be classified as money services businesses.
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Such firms will have to register with Canada’s Financial Transactions and Reports Analysis Centre (Fintrac), while being a subject to record keeping, verification procedures, and suspicious transaction reporting and registration requirements.
Furthermore, these companies will be required to implement anti-money laundering compliance measures.
The Canadian regulator has barred banks from offering services to firms that do not register with Fintrac.
MNP senior financial crime advisor Christine Duhaime said, "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. But this legislation is an important step forward," Duhaime added.
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By GlobalDataThe new legislation will cover Canadian virtual currency dealers, such as exchange operators and ATM networks, as well as bitcoin companies from outside Canada, serving the country.
According to an estimate, approximately, $300m will be invested in Bitcoin start-ups by venture capitalists by the end of 2014 across the globe, with Canada receiving the second largest portion of that funding after the US.
