Global Legal Insights on Blockchain and Cryptocurrency Legislation

Conrad Druzeta, Simon Grant, Matthew Peters and Ceilidh Hemmati author the Canada chapter in Global Legal Insights‘ Blockchain and Cryptocurrency Legislation 2019. They provide a detailed look at key areas of blockchain and cryptocurrency legislation:

• Government attitude and definition
• Cryptocurrency regulation
• Sales regulation
• Taxation
• Money transmission laws and anti-money laundering requirements
• Promotion and testing
• Ownership and licensing requirements
• Mining
• Border restrictions and declaration
• Reporting requirements
• Estate planning and testamentary succession

Conrad, Simon, Matthew and Ceilidh’s insights include:

The general attitude of the Canadian government (including regulatory agencies) to cryptocurrencies has been a mix of caution and encouragement: caution in terms of protecting investors and the public, but encouragement in its support of new technology.

The Canadian government itself is also experimenting with blockchain technology.

For taxation purposes, cryptocurrencies are treated as commodities, not as money. Under securities laws, many cryptocurrencies or “tokens” are classified as securities.

Cryptocurrencies are not treated as legal tender in Canada. Despite this, the Bank of Canada tested Digital Depository Receipts (DDR) as a digital representation of Canadian currency in 2016 and 2017.

Project Jasper was a joint initiative between the public and private sector, conducted by the Bank of Canada and Payments Canada with the help of banks and corporations (such as R3). Together, they built and tested a closed, simulated payment system to better understand the potential for blockchain to augment or displace FMI. Project Jasper marked the first ever DLT experiment in which a central bank partnered with private financial institutions.