Regulation Only as Necessary for Digital Currencies
Ottawa – The best strategy today for dealing with digital currencies into the future is to tread carefully when it comes to their regulation, according to a report released by the Standing Senate Committee on Banking, Trade and Commerce.
“After 14 months of study and consideration, we believe that the best way to move forward with digital currencies is to monitor the technologies, particularly cryptocurrencies, as they evolve, while government organizations, such as Canada Revenue Agency (CRA), the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) and police services, continue learning to navigate and use blockchain technology,” said Senator Irving Gerstein, Committee Chair.
“These new technologies may have innovative and as-yet unimagined applications and are at a delicate stage in their development and use. We must tread carefully when contemplating regulations that might restrict and stifle their potential.”
- Senator Irving Gerstein, Chair
The Report also examines the role that digital currency technologies, particularly the blockchain technology that underpins Bitcoin, can play:
- In bringing financial services to the 2.5 billion people (one-third of the world population) who are “unbanked,” or, in other words, in increasing financial inclusion in developing countries;
- In better securing financial transactions by putting a person’s security and online identity into her or his own hands;
- In reducing the costs of financial transactions; and
- In helping governments to enhance the security of private information they hold.
“One key thing to understand here is that cryptocurrencies are so much more than just virtual cash - they’re the force behind a new way of interacting over the internet,” observed Senator Céline Hervieux-Payette, the Committee’s Deputy Chair. “An increasing number of organizations - including Microsoft, Dell, Amazon, Home Depot, Subway and Simon Fraser University - have embraced digital currency. Today, you can buy a car, an airline ticket or even a sandwich with Bitcoin.
“The Banking Committee is confident that the implementation of our recommendations will have positive outcomes for consumers, merchants, digital currency-related businesses, Canada’s financial services sector and others.”
- Senator Céline Hervieux-Payette, Deputy Chair
Digital currencies can be simultaneously viewed as a new currency, a new payment system and a new technology. The Committee examined virtual currencies from all three perspectives.
The Report, which is the result of testimony from 55 witnesses at Ottawa Committee meetings and a fact-finding trip to New York City, contains eight recommendations.
Read the full report Digital Currency: You Can’t Flip This Coin!
To learn more about the Standing Senate Committee on Banking, Trade and Commerce, please visit the committee website at https://sencanada.ca/en/committees/banc/. Follow the Senate of Canada on Twitter @SenateCA and use the committee hashtag #BANC for updates on its activities.
