Bitcoin Price Chart in Canadian Dollar
Bitcoin Market Capitilization
Bitcoin in Canada
The Canadian Government’s position on bitcoin and blockchain is that it is electronic money and not actual legal tender in Canada. Only the Canadian dollar is considered legal tender (making the US dollar and other currencies not legal tender also). The Currency Act defines legal tender as bank notes issued by the Bank of Canada under the Bank of Canada Act and coins issued under the Royal Canadian Mint Act. However it does consider bitcoin as a foreign currency.
Where the Canadian government steps in is mostly in the arena of ICOs (initial coin offerings). As in the US and Singapore the Canadian Government has tended to frown on ICOs considering them to be securities rather than currencies. At the time of writing no government department has issued any written advice relating to taxation requirements in law relating to bitcoin. The CRA (Canadian Revenue Agency – The Canadian equivalent to the IRS) simply applies the Income Tax Act and that implies that two potential tax rules may apply to bitcoin depending on how they are used, whether for transaction or investment purposes.
According to Philippe Brideau, CRA spokesperson, current barter transaction rules relating to the purchase of goods and services would apply between parties even if value has been received in bitcoin just as in fiat currency. Any gain in value should be recorded as a taxable gain relating to the value of the goods being exchanged or sold. He said, “When bitcoins are bought and sold like a commodity, any resulting gains or losses could be income or capital for the taxpayer depending on the specific facts.” Further, in a CBC news article, Brideau referenced CRA Interpretation Bulletin IT-490 dated 5th July, 1982. Referring to, “sophisticated computer-controlled systems of commerce proliferated by franchised, members only barters clubs, where credit units possessing a notional monetary unit value have become a medium of exchange.” And he also stated, ““persons or entities engaged in the business of foreign exchange dealing, of remitting funds or transmitting funds by any means or through any person, entity or electronic funds transfer network, or of issuing or redeeming money orders, traveler’s cheques or other similar negotiable instruments except for cheques payable to a named person or entity.” And that barter rules apply to these exchanges.
The regulations associated with the PCTFA (Proceeds of Crime (Money Laundering) and Terrorist Financing Act ) is likely to be a indication that any Canadian bitcoin exchange will or would need to have in place a compliance regime such as:
- A compliance officer established to ensure that a compliance regimen would be put in place with someone who will have enough authority and autonomy in the organization to be able to put into effect the compliance regime.
- A comprehensive compliance policies and procedures manual established detailing how all the registrations, reporting policies, record keeping, Client ID and risk management policies would be put in place with the manual reviewed every two years by FINTRAC.
- A KYC (Know your customer) policy established and records securely kept All large cash transaction and electronic fund transfer report sent to FINTRAC within two weeks of receipt of 10,000 dollars or more in cash or electronic funds on one single transaction from one client or more and two such transactions within a 24 hour period.
Despite this currently federal law in Canada is that crypto currencies. brokerages , exchanges, online and storefront vendors are not at the moment the subject of any singular legislation but that is not to say they will not, at some time be subject in the future.
“In many cases, when the totality of the offering or arrangement is considered, the coins/tokens should properly be considered securities, in assessing whether or not securities laws apply, we will consider substance over form.” the CSA has stated.
This is an area to keep up to date on. This article is for information purposes only and is not to be construed as financial information for any purposes such as investment or speculation and it is the responsibility of the reader to perform proper due diligence before acting upon any of the information provided. We recommend that you consult with a licensed, qualified investment advisor before making any investment decisions.