Canada Postpones Tougher Regulation of Blockchain Companies

Canada Postpones Tougher Regulation of Blockchain Companies

  • The Canadian government has placed a temporary hold on sweeping new cryptocurrency regulations
  • New legislation pertaining to Canadian blockchain companies was expected to come into force after a 12-month transition period starting in late 2018
  • As of August 2018, new regulatory powers now won’t be enacted until late 2019

Canada Postpones New Cryptocurrency Regulated Until 2019

As of August 28th, 2018, the Canadian Parliment has halted plans to change how blockchain companies are regulated in Canada. At present, it is unclear whether plans for stricter regulation of blockchain companies will be amended. However, what is certain is that no new legislation will start to come into effect until 2020.

Why Blockchain Companies in Canada are Breathing a Sigh of Relief

In May 2018, the Canadian government released a draft update to Canada’s Money Laundering and Terrorist Financing Act. Specifically, one which sought to impose stricter oversight of Canada-based blockchain companies.

Dedicating an entire chapter to ‘virtual currency,’ the Canadian Department of Finance stated that:

“ Virtual currencies are increasingly being used to facilitate fraud and cybercrime, and to purchase illicit goods and services on the dark Web.”

As part of an effort to counter fraud and terrorist financing, legislation has, therefore, been proposed which would impose stricter regulations on both individuals and businesses.

Canada’s New Virtual Currency Regulation at a Glance

New legislation proposed by the Department of Finance, chiefly concerns mass data collection.

If enacted, any person or entity “dealing in virtual currency” would be required to register as a bonafide money service businesses (MSB). More worryingly, each MSB would be obligated to collect accurate records concerning where cryptocurrency transactions originate, virtual currency user identities, and details concerning whom digital assets are exchanged between.

According to the Department of Finance, compliance with new legislation could result in a loss of up to $60 million for existing blockchain businesses. However, many have also argued that new legislation would stifle future innovation.

  • Proposed legislation does not differentiate between cryptocurrency exchanges and blockchain technology startups
  • It is unclear whether MSB rules would also apply to ICO token creators
  • As well as being vague, new regulations could potentially criminalize decentralized cryptocurrency exchanges and privacy coins

How Would Cryptocurrency Users be Affected by Changes?

The Department of Finance has stated that it does not wish to regulate virtual currencies themselves. However, many argue that proposed legislation does this by proxy. This is due to the fact exchanges and blockchain technology startups would be required to collect much more information on specific platform users.

What Happens Now?

At present, proposals outlined in Canada’s Money Laundering and Terrorist Financing Act will not start to come into force until late 2019. This gives blockchain companies one more year to carry on with business as usual. If and when new regulations do come into effect, businesses will then have a further year before legislation starts being enforced.

Bitcoin Price & ETFs in Canada

Bitcoin EFT Rejected – How will Canadian Investors be Affected?

  • The U.S. Securities and Exchange Commission (SEC) has rejected 9 Bitcoin ETF applications
  • Exchange Traded Funds (ETFs) were expected to attract substantial institutional investment into the cryptosphere
  • SEC rejection could now lead to a Bitcoin price dip pending possible disapproval of further ETFs in September

The Latest Bitcoin ETF Decision – What do You Need to Know?

In a possible blow for Bitcoin, The U.S. Securities and Exchange Commission (SEC) has rejected approval of 9 Bitcoin ETF applications. Specifically, ETFs presented by leading investment firms ProShares, GraniteShares, and Direxion. The only question is, how will the latest Bitcoin ETF decision affect Bitcoin prices going forward?

What is a Bitcoin ETF?

To understand how the latest Bitcoin ETF decision might affect investors, it is important to understand what an ETF is.

Canada boasts one of the worlds best cryptocurrency adoption rates. In a recent survey, 58% of Canadians identified themselves as being invested in Bitcoin. However, for the most part, all such investment is consumer market-based. People on the street are invested in Bitcoin. Companies and institutional investment firms, on the other hand, are not.

Bitcoin EFT Rejection Doesn’t Really Change Anything

At present, institutional investors refrain from investing in Bitcoin, because the process is too complicated.

Investing in cryptocurrency requires the identification of a single person who can be trusted to register at an exchange, buy Bitcoin, and store coins safely. ETFs would change this. A Bitcoin ETF would be similar to a regular stock bundle. Traders would then have the option to buy, sell, and trade ETF shares, in the same way they do regular stocks.

  • The only way to invest in cryptocurrency at present is to buy Bitcoin and other coins from exchanges like MyBTC.ca or QuadrigaCX.com
  • Buying Bitcoin from exchanges is too high-risk for institutional investors. (Most exchanges are unregulated. Also, if an exchange is hacked or an account validation error occurs, investors would be liable for any loss of funds)
  • A Bitcoin ETF would benefit investors by allowing traders and investors to buy and sell BTC instantly via the mainstream stock market

Because Bitcoin ETFs are not already on the market, the latest Bitcoin ETF decision doesn’t change anything. However, this doesn’t make the present Bitcoin price any less volatile.

Will Bitcoin go Up or Down as a Result of the Latest SEC Decision?

By and large, Canadian investors HODL Bitcoin. However, the latest EFT news puts traders in particular, in a very challenging position.

The U.S. Securities and Exchange Commission has cited potential price manipulation, as its reason for rejecting current Bitcoin ETF applications. However, alternative ETF applications presented by VanEck and Bitwise, will not be approved or rejected by the SEC until Sept 30th.

Delaying a decision on further ETF applications until late September may see investors pump the Bitcoin price higher up to this point. However, if the SEC rejects Bitcoin EFT applications presented by Bitwise and VanEck, this could lead to a considerable decline in cryptocurrency prices.

Is Bitcoin Still a Viable Long-Term Investment?

In its recent ETF ruling, the U.S. Securities and Exchange Commission stated that:

“Disapproval does not rest on an evaluation of whether Bitcoin, or blockchain technology more generally, has utility or value as an innovation or an investment.”

In short, SEC rejection of Bitcoin EFTs does not diminish the real value of Bitcoin. Moreover, new ETF applications will continue to be presented by other investment firms. Institutional investors want ETFs just as much as existing cryptocurrency investors do. All that remains to be seen, is when such investors will be given an opportunity to enter the market.   

Canadian Exchange Prepared for Hard Fork

QuadrigaCX XBT Hard ForkQuadrigaCX is the only Canadian exchange of nearly 20 that has committed to a contingency plan in the event that the bitcoin network splits in two, creating two competing currencies.

These exchanges are now planning to list Bitcoin Unlimited (BU) as they would an alternative cryptocurrency, according to the statement. BU is an alternate implementation of the bitcoin software that seeks to expand the block size in an effort to scale the network’s capacity.

The plan is backed by Bitfinex, Bitstamp, BTCC, Bitso, Bitsquare, Bitonic, Bitbank, Coinfloor, Coincheck, itBit, QuadrigaCX, Bitt, Bittrex, Kraken, Ripio, ShapeShift, The Rock Trading and Zaif – the exchanges would list the BU asset under the BTU or XBU tickers in the event of a network split, which they collectively say “may be inevitable”.

Read the full article here on Coindesk: http://www.coindesk.com/bitcoin-exchanges-unveil-emergency-hard-fork-contingency-plan/

Bitso Partners with Canadian Paycase

PaycaseCryptocurrencies such as Bitcoin and Dash have a big role to play in the future of remittance payments. Cryptocurrencies are easy to transfer across the globe without being hindered by banking requirements. Bitso, one of Mexico’s largest bitcoin exchanges, has created a Mexico-Canada remittance corridor with the help of Paycase. Moving funds from bank accounts between the two countries by using blockchain technology is now an official feature.

Read the full article here: http://thedashtimes.com/2017/03/12/bitso-creates-cryptocurrency-based-remittance-corridor-mexico-canada/

 

Buy Bitcoin w/ Flexepin Voucher

Bitcoin with Prepaid CreditIn addition to accepting prepaid non-reloadable credit cards, www.MyBTC.ca now accepts Flexepin Vouchers.

Flexepin vouchers can be purchased with cash or debit at 4,000+ Retail Purchase Locations Canada-wide: https://mybtc.ca/flexepin-voucher-purchase-locations . Once you have purchased your Flexepin voucher featuring a unique 16-digit code, you can redeem it on www.MyBTC.ca to buy Bitcoin immediately.

Bank of Canada Bitcoin Paper

Bank of CanadaThe central bank of Canada has published a new working paper that suggests its researchers believe digital currency exchange rates will become less volatile should adoption increase.

Penned by researchers Wilko Bolt (of the central bank of The Netherlands) and Maarten RC van Oordt (of the Bank of Canada’s Financial Stability Department), the paper offers a possible “economic framework” for exchange rate analysis. Published on 18th August, it further represents the latest work from a major central bank, following growing interest from this segment of the financial community in recent months.  Read full paper here: Bank of Canada Bitcoin Paper

Coinbase in Canada

Coinbase CanadaYou can now buy and sell bitcoin online with Coinbase in Canada.  They have partnered with Canadian payment processor, Vogogo and offer 2 funding options that include Electronic Funds Transfer (EFT) where you link your bank account and they pull Canadian dollars from it if you are buying or push funds to if you are selling.  The other option exclusively for buying is Interac Online, it’s the instant funding method supported by major banks and credit unions such as BMO, RBC, Scotia, TD, Envision Financial, Libro Credit Union and Windsor Family Credit Union. No ID verification required for daily transactions up to $200.  If you follow this special promo link you’ll also receive $10 back in BTC after you make your first deposit of $100 or more: www.coinbase.com

For more information on Coinbase visit www.CoinbaseReview.com

Canadian Senate – Bitcoin Regulation

2000px-Reddit.svgWhile most governments have been taking steps to regulate the bitcoin industry and others declaring a completely close-minded stance against digital currencies, Canada’s Senate decided to vote against bitcoin regulation. The Canadian Senate’s Banking, Trade and Commerce (BTC) committee released its findings last Friday and asked the federal government to use a “light touch” in dealing with digital currencies.

 

Reddit: http://www.reddit.com/r/Bitcoin/comments/3aei7c/heres_what_the_canadian_senate_just_put_in_the/

RushWallet by Kryptokit

RushWallet by Kryptokit The team behind the popular Kryptokit wallet and encrypted messaging extension for Chrome browsers now has a new offering called RushWallet, allowing near-instant bitcoin wallet creation from any device or platform.

The philosophy behind RushWallet is “ease of use and removing friction”; effectively, bitcoin should be as quick and accessible as reaching into your pocket for some cash. There shouldn’t be any need to remember login and password credentials every time you need to spend some money, and you should keep full control over your private keys.

Read more here:  http://www.coindesk.com/rushwallet-delivers-fast-frictionless-login-free-bitcoin-wallets/

CaVirtex Verifications

Green CheckmarkLeading Canadian Bitcoin exchange, CaVirtex, is now caught up on the massive list of verifications they had to plough through due to a major spike in new customers.  They are now back at the usual processing time of 2-5 business days to get verified.