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In 2019 FATF, The Financial Action Task Force released Recommendation 16, a set of international standards on combating money laundering and the financing of terrorism & proliferation. All FATF member countries are advised to adopt the recommendations. As of June 2020, these recommendations are law in Canada. The FATF document included advice on regulating digital currencies. Canada’s digital currency is growing despite the QuadrigaCX scandal that put the cryptocurrency industry of Canada in the center of attention. In 2018 the company that was entrusted a couple of hundred million dollars to its clients was declared bankrupt and its CEO, whose death is still debated, was the only person with access to the clients’ money. However, the Canadian digital currency industry is still growing. A bitcoin fund was recently listed in Toronto Stock Exchange, the ninth-largest stock market in the world. Since the FATF regulations were adopted, the cryptocurrency firms are officially recognized as Money Service Businesses. The cryptocurrency industry is a big part of Canada’s digital economy and is adopted by many branches.
How Crypto Changed the Digital Economy for Canada
Canada puts a lot of effort into advancing the digital economy. Canada’s Digital Charter of 2019, published by Navdeep Bains, Minister of Innovation, Science, and Industry, is a set of principles that the country will follow as the digital economy advances. The principles are based on values such as equality, transparency, and safety. The aim is to provide equal access to digital technologies for all citizens and businesses of Canada and create a safe environment for everyone. Cryptocurrency is one of the main branches of the digital economy and will probably become bigger and bigger. The way it affects other economies can be seen well in the example of the iGaming industry. Several years ago casinos online for real money in Canada saw a growing trend of crypto. From that moment, iGaming platforms started accepting digital currencies such as Bitcoin, Ethereum, and Ripple for gambling purposes. That enabled the iGaming providers to focus more on international users. Cryptocurrencies are easily accessible in many countries. The transactions with digital currencies do not take as much time as the transactions of traditional money. It will normally take under an hour to get your money in the form of digital currency. The currencies are not the only field where online casinos started offering a greater variety of options. The choice of games that they provide is also bigger than what the gamers get in traditional casinos. Along with traditional games such as roulette, poker table, slot machines, sports betting iGaming platform also offer competitions in video games. Many genres of video games are used for iGaming platforms, many popular characters from comic books and films, such as Batman and Wonder Woman make appearances. The industry is considering many ways to increase security. iGaming platforms implement new technologies, such as facial recognition technology, that help prevent fraud and identity theft.
Canada Tightens Crypto Regulations Alongside AML/CTF Overhaul
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The regulations that the cryptocurrency firms, as of June 2020 recognized as Money Service Businesses, will be subjected to are the same as for any other MSBs. The Financial Transactions and Reports Analysis Center of Canada (FINTRAC) will soon announce the new anti-money laundering (AML) and counter-terrorist financing (CTF) regulations. On March 10th, FINTRAC published a report stating that the center will focus a lot on digital currency firms for the foreseeable future. The more the technologies advance the more challenges there are for the regulators to deal with, says the report. The digital currency firms of Canada will have to report any transaction over 10,000 CAD. The cryptocurrency firms that are located outside the country but have Canadian clients will have to follow the same laws. Cryptocurrency is one of the most vulnerable branches of the industry and violations of AML and CTF rules often occur, according to FATF. FINTRAC will consult the stakeholders and work with the industry representatives.
