Cryptocurrency holders in Canada can now set their minds at rest with the recently-passed law that ensures virtual currency-transactions are highly secure. The unregulated nature of cryptocurrencies had been a cause of it’s ‘constant scrutiny and criticism’ by the Canada Revenue Agency (CRA) in the past. But the laws have changed for the better and currently embrace the newcomers in the financial market by upping security standards.
The Canadian government revised the Proceeds of Crime (Money Laundering) and Terrorist Financing Act in the Canada Gazette on July 10, 2019. The amendments are predicted to underpin Canada’s fight against money laundering, reduce loopholes in the AML/ATF Regime, and intensify regulations concerning virtual currencies. The government stated that the recent amendments were directed at individuals or entities who were dealing with virtual currencies and not virtual currencies themselves.
Benefits derived from this Act
The Act now defines both Canadian and foreign cryptocurrency platforms as money service businesses (businesses that transmit or convert money). It stipulates that money service businesses (MSBs) are required to fulfill all obligations including registration with the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC). The obligations are categorized into the following:
- Record keeping of all business activities
- Customer due diligence (identity verification)
- Reporting of questionable transactions (suspicious/above CA$10,000)
- Establishment of a full compliance program
Effective implementation of the amendment can help Canada ameliorate the security of its citizens and also uphold financial probity. Consequently, the prospects for investment and business in the country from external sources will increase. An economy that is renowned for its economic stability and low crime rate will entice potential investors.
Financial institutions will be able to circumvent strenuous obstacles faced with regulations and cut down on additional expenses when conducting business overseas. If there was an ineffective AML/ATF Regime in place, the concerned area would be a hub for terrorist financing activities and money laundering, which will, in turn, repel investments.
The Canadian government has adapted to the progress in the fintech sector and does not want to hinder innovation. As a result, they have focussed on enforcing regulations that ensure the secure and ethical use of cryptocurrencies as a positive alternative to prohibiting their existence. Subsequent to this amendment, banks and other financial institutions will extend their services to virtual currency-businesses without reluctance.
The environment is becoming more accepting towards cryptocurrencies and the entities dealing with them, the scope for innovation has widened. Seize this opportunity and gain from investing in the lucrative and fascinating world of cryptocurrencies. We bring with us our expertise in blockchain technology to help you Create your own Cryptocurrency Exchange Platforms and engage in secure business.