Canada MSBs and Cryptocurrencies

Canadian Money Service Businesses are often used for the operation of Crypto Exchanges and similar operations. We would not stop anyone from starting an MSB for such purposes, but we do have our reservations and from our point of view, there are better regulatory alternatives. Various uncertainties exist with regards to upcoming Canadian regulation and interpretations both on provincial and federal levels. Authorities are talking about stable coins constituting securities and/or derivatives just to mention one example.

Binance, the biggest crypto exchange in the world, recently pulled out of Canada entirely due to the regulatory uncertainties and new measures.

Another option? Crypto Friendly Montana
Montana is generally considered very crypto friendly and as recently as mid 2023 a new bill was passed protecting the right to mine Bitcoin “without being subjected to undue discrimination or requirements”. The proposed law would also ban unequal utility rates for digital asset mining, restrict the authority of local governments over digital asset mining, and disallow targeted taxes on using cryptocurrency for payments. Furthermore, the legislation classifies digital assets as personal property. It stipulates that the Montana Public Service Commission is prohibited from setting up a rate category for digital asset mining, commercial digital asset mining operations, or residential digital asset mining that results in unfairly biased rates. The bill also asserts that the use of digital assets for payment cannot be subjected to extra taxes or fees by either the state or local authorities. See for more information.

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