The imminent arrival of compliance requirements to the virtual currency industry means that bitcoin businesses starting up in Canada should set up their business model and practices in ways that facilitate compliance with not only anti-money laundering laws, but privacy and consumer protection laws as well.
Bitcoin -- the virtual currency and global payment system -- is coming off a banner year. Recently an official from the Federal Department of Finance apparently indicated in an email to a media outlet that bitcoin is not legal tender in Canada. That was cause for David George-Cosh to suggest that Canada was "putting a question mark over the use of" bitcoin in Canada in a Wall Street Journal post. In my view, the comment from Finance does nothing to inhibit bitcoin's growth, acceptance, or adoption in Canada.
This week, Bitcoin got a (rocket) boost when Sir Richard Branson announced that his company Virgin Galactic will accept the digital currency as payment for space flights. "While the world of travel is rapidly advancing, the world of payments is changing fast too," Branson wrote in a blog post Friday. "Sometime in the future, innovative payment models such as Square, Clinkle and Bitcoin will become serious challengers to traditional banks, which will spur more competition and give customers even more options." More and more businesses are coming to the same conclusion as Branson.
Last week, the FBI successfully shut down Silk Road, an online illegal-drug marketplace that used Bitcoin as a method of payment. Calls to go after Bitcoin have followed, but they don't make sense. The evil and avarice that live in people's hearts will not be eliminated by stamping out any particular currency.