Canada is taking notice of Bitcoin, but it hasn’t taken the form of any official recognition or blessing. Indeed, their most recent position on the matter was that ”only Canadian banknotes and coins are recognized as legal tender in Canada”.
Rather, the increasing prevalence of Bitcoin and its peers as alternate currency has authorities concerned about how it can facilitate money laundering and terrorism. As reported by CBCNews, the move aims to sever possible links between charitable organizations, online casinos, sports groups and the like with organized crime or terrorists.
The budget document states:
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“It is important to continually improve Canada’s regime to address emerging risks, including virtual currencies, such as bitcoin, that threaten Canada’s international leadership in the fight against money laundering and terrorist financing,”
The plan is a prudent move on the heels of string of bitcoin-related arrests in the U.S. over recent months. Thus, the initiative is not in specific response to known threats, but rather a preparatory measure for the government to act when needed.
The government has earmarked $23 million for FINTRAC (Financial Transactions and Reports Analysis Centre) over the next 5 years to fund such additional oversight.
It is unclear at this point how authorities will be monitoring cryptocurrency activity, considering that it’s outside their umbrella of authority. In the case of the arrests of Charlie Shrem and David Faiella, multiple law enforcement organizations worked together to conduct extensive investigations to piece together the allegations.