The Canada Revenue Agency (CRA) does not consider the use of cryptocurrencies and Bitcoin as certified mediums of exchange in Canada. The interpretation of the currency act states that the monetary unit of Canada is the CA dollar. The non-traditional challenges encountered by regulatory agencies are to restructure legal and financial perceptions of what “currency” is to be considered in the 21st century. The introduction of innovative blockchain technology will no doubt remove the need for precautionary legislative intervention by eliminating intermediary parties.
The Bank of Canada conducted a survey, the level of Bitcoin awareness increased from 64% to 85% over a period of 2 years and the ownership of BTC increased to 0.5% respectively. It is evident that the adoption of cryptocurrency is gradually becoming more prevalent and accepted by society at large.
Hut 8, one of the largest mining farms in Canada, located in the southeast regions of Alberta has invested over CA$80 million in the development of blockchain infrastructure and innovative solutions.
There is speculation in the market that Bitcoin halving will cause considerable lower profit margins, requiring mining farms to file applications for support from federal and provincial governments.
Digital currencies in Canada are also subject to the Income Tax Act. How can policies be applied to transactions of intangible crypto assets? The thought of opting for privacy wallets and mixers does make one wonder how organizations such as the IRS or CRA will conjure up methods to trace the use of private coins. Monero (XMR) can be used as a prime example of being one of the largest open-source cryptocurrencies.
In March of 2014, the CRA stated Bitcoin mining activity in Canada is not exempt from taxation. Perhaps investors and those who mine Bitcoin can consider conducting business in alternative regions, such as the CIS country Armenia with 0% tax on generated revenue with higher returns on investment?
The Government of Armenia published a document on the 1st of March 2018, affirming its efforts to draft laws and policies in the adoption of digital technologies and cryptocurrency. A territory of opportunities has been developed in the Free Economic Zone of Armenia. The zone is committed to the development of digital business and innovative technological products and services. The ecosystem enables the likes of Bitcoin mining farm ECOS — situated in Hrazdan to perform legal mining operations.
Governmental policies have provided the liberalization of cryptocurrency mining activities and their exemption from taxes.
Macro indicators in the Commonwealth of Independent States (CIS) regions reflect an overall estimated GDP growth of €1.737 trillion.
Statistics show a growing consensus that CIS regions are highly underrated in the global market. New strategies need to be implemented to introduce the development of decentralized and unbias business models.
Author: Jasmine Leeuw
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