Canadian Cryptocurrency Firms Now Legally Recognized as Money Service Businesses
On June 1, 2020, the Canadian federal government declared all cryptocurrency exchanges and crypto payment processors as Money Service Businesses (MSBs). All crypto firms in Canada will now have to operate under the ordinance of the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC). They are also asked to register as a money service business.
Francis Pouliot, the founder of Bull Bitcoin and CypherNode, shared his outlook with a tweet. He said, “Today is my last day as an unregulated dealer in virtual currency. As of June 1, 2020, Bitcoin exchanges and payment processors are officially regulated as Money Services Businesses in Canada. Full circle 7 years after I started my career in Bitcoin lobbying on this very issue.”
Francis, like every other cryptocurrency enthusiast, supports the decision by the Canadian government. He believes that cryptocurrency is money and should be regulated like every other form of currency or its equivalent. Francis claims that during the decision-making process, he was closely involved with the Ministry of Finance (MOF) and FINTRAC.
The regulation of cryptocurrencies may come off as a relief for those involved in the business. Most crypto firms in Canada knew this was coming. They began preparing for the change a year ago. Some also submitted applications to the Ministry of Finance and FINTRAC a few months back. They are ready to go.
What Is a Money Service Business?
Any organization that uses money to trade goods or services comes in the category of Money Service Business. A business or organization carrying out transactions without adhering to the rules and regulations set by that particular country’s financial institution will be considered guilty.
Since the crypto industry is now a Money Service Business, almost every other industry will have to adapt to the new form of currency.
Let’s take the game betting websites, for example. Now it is safe to play casino online with cryptocurrency. Things have become more straightforward for both the casino owner and gambler. You can play online casino slots without having to enter your credit card details. Simply link your crypto account with the gambling website.
You must understand that cryptocurrencies like Bitcoin and Monero were not considered as standard currency by the financial regulators in North America. However, they were used to carry out personal and professional transactions under the statute of their local regulators.
While they still will have jurisdiction over the crypto companies, general businesses and customers will have the freedom to use cryptocurrency as equivalent to money.
What Does This Change Mean for a Cryptocurrency-Using Average Canadian Citizen?
An average crypto-currency user or investor can now skip the hassle of KYC (Know Your Customer). They also rest easy, as businesses won’t perform a credit check whenever you wish to carry out a major crypto transaction. Hard credit checks can be very taxing on the credit score.
Although there are concerns that small businesses running exchanges with inexpensive mining software will continue to operate unregulated. If such practices occur behind the door, things can get ugly.
Hence, the FINTRAC will have to work doubly hard to make sure the new rules are implemented throughout the nation. In conclusion, the decision to regulate the cryptocurrency services is beneficial to everyone.
Featured image: unsplash.com