Cryptocurrencies: Not legal tender
Cryptocurrencies aren’t legal tender in Canada but the Canada Revenue Agency has taxed them since 2013. Canada has been fairly proactive in its treatment of cryptocurrencies: back in 2014 it brought entities dealing in virtual currencies under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, while in 2017 the British Columbia Securities Commission registered the first cryptocurrency-only investment fund.
Cryptocurrency exchange regulations in Canada are inconsistent at the provincial level, but at the federal level, the authorities treat cryptocurrencies as securities. In August 2017, the Canadian Securities Administrators (CSA) issued a notice on the applicability of existing securities laws to cryptocurrencies, and in January 2018, the head of Canada’s Central Bank, characterized them “technically” as securities.
More regulation on crypto exchanges is on the way. In response to its mutual evaluation by FATF, Canadian authorities issued draft amendments to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act in June 2018. The revised regulations will now include cryptocurrency exchanges – meaning those entities are subject to reporting obligations, and essentially regulated in the same way as Money Services Businesses.