Canada Becomes First Country to Sign Bitcoin Regs into Law
June 26, 2014
An omnibus budget implementation bill passed into law last week by the Canadian federal government included new requirements regulating bitcoin-related companies, which makes Canada the first country to implement national rules governing digital currencies. Bill C-31 , which received royal assent from Canada’s Governor General on Thursday, has several important implications for the companies that process and accept bitcoin or other crypotcurrency payments.
The law officially recognizes any company “dealing in virtual currencies” (though it does not define the phrase) as a money services business, which requires that business to register with the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC). Registration as an MSB with FINTRAC means the company must comply with the agency’s strict anti-money laundering requirements. This also applies to foreign companies that have a presence in Canada or “direct services at persons or entities in Canada.” Registration for covered companies will be vital because Canadian banks will be prohibited from opening accounts for unregistered bitcoin companies.