Canada Lays Framework for Digital Currency with New Regs (June 24, 2014)
While digital currency has received a frosty reception from many national governments, it has been greeted a bit more warmly in Canada. Now, the Canadian parliament has taken a major step toward establishing a framework for regulating Bitcoin and other digital denominations, passing a bill classifying firms dealing in digital currencies as money services businesses.
The new rules will subject digital currency firms to requirements covering recordkeeping, verification, suspicious activity reporting and registration. Dealers also will be required to register with Canada’s Financial Transactions and Reports Analysis Centre and establish AML compliance measures. The regulations cover all digital currency companies that do business in Canada, whether they’re based inside or outside of the country.
While the regulations place new strictures on digital currency providers, they also can be viewed as a major milestone in establishing the legitimacy of Bitcoin and other currencies. Some officials in the U.S.—including Senator Joe Manchin, (D.-W.Va.)—have called for an outright ban on such currencies, claiming their anonymized nature makes them conducive to illegal activity. China and India also have passed measures restricting Bitcoin. Digital currency backers have expressed support for new rules but cautioned that over-regulation could hinder development by stifling innovation and investment.
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