Canadian Finance Minister Says Government Looking Into Risks Associated With Bitcoin

Canadian Finance Minister Bill Morneau says Ottawa is looking at the risks associated with Bitcoin to ensure that the cryptocurrency isn’t being used for illicit purposes such as money laundering or terrorist financing.

Specifically, Minister Morneau said that Ottawa’s focus on Bitcoin is “making sure that we understand what’s going on underneath that market, to make sure that we aren’t introducing any risks into our economy, whether they be risks like money laundering or terrorist financing.”

Minister Morneau’s comments come less than a week after Bank of Canada Governor Stephen Poloz said that Bitcoin is “gambling” and needs to be regulated.

“There is no intrinsic value for something like Bitcoin so it's not really an asset one can analyze. It's just essentially speculative or gambling," said Governor Poloz at the recently held World Economic Forum in Davos, Switzerland.

Minister Morneau tempered his remarks about Bitcoin somewhat, saying that Canada has no immediate plans to change the existing tax code to deal with cryptocurrencies. As an investment, he said, Bitcoin’s tax treatment “isn’t unique in any way.” People trading Bitcoin shouldn’t hold their breath waiting for specific rules on how they’ll be taxed.

“We don’t have any specific Bitcoin or cryptocurrency overhaul” in the works, said Minister Morneau. Though he stressed that officials within the Finance Department in Ottawa are monitoring and examining the risks associated with cryptocurrencies.

For his part though, Governor Poloz said in an interview with CNBC in Davos that Canada’s central bank will look to regulate cryptocurrencies, including Bitcoin.

"I have no doubt that, at least for the purposes of consumer protection, we will be developing regulations around this space in due course. But what we are being careful to do here is to not stifle innovation," said Governor Poloz.