Bitcoin is Not Legal Tender Says Canada’s Government

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Bitcoin is Not Legal Tender Says Canada's Government
Bitcoin is Not Legal Tender Says Canada's Government

Bitcoin is Not Legal Tender Says Canada's Government

Bitcoin which has been receiving better responses in Canada, particularly after the first BTC ATM was installed in Vancouver, is now facing huge challenge as the government of the country says that it doesn’t consider Bitcoin a legal tender. According to Finance Department of Canada only Canadian bank notes and coins are recognized as legal tender in Canada.

The department official said that Bitcoin digital ‘currency’ is not legal tender in Canada. However, he declined to comment on whether the government plans to license money exchanges that would convert Bitcoins for real currency such as the Canadian dollar. The latest development is a major concern for Bitcoin companies and users.

In his statement Alexandre Deslongchamps, spokesman for the Bank of Canada said that financial-stability considerations are what would prompt the Bank of Canada to take a greater interest in Bitcoins and other alternative means of payment. The government in close coordination with the central bank and the Office of the Superintendent of Financial Institutions are expected to monitor digital currencies closely.

Alexandre Deslongchamps further added that smaller, stand-alone payment systems for which there are many substitutes – like Bitcoin — should generally require much less intensive oversight and regulation because they pose much less risk to the Canadian financial system as a whole.

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Clarifying the stand taken by the government of Canada, Alexandre Deslongchamps further said that these payment systems should be designed and operated to meet the needs of Canadians which would include convenience and ease of use, price, reliability, safety, and effective redress mechanisms.

It according to some market observers is a major setback for Bitcoin which is quite popular in Canada where there are roughly 100 businesses that accept it as a form of payment. The country had become the host of the first ever BTC ATM and this week itself Canada’s second Bitcoin ATM was launched in Toronto.

Earlier Chinese and Indian governments took measures that warned Bitcoin users that it is a risky currency and not a legal tender. ForexMinute had reported earlier about the decisions made by the Indian and Chinese government and how it hit the Bitcoin market at large. The best part with Bitcoin is that there is no big trouble in the U.S.

In fact, former Federal Reserve Chairman Ben Bernanke welcomed Bitcoin and admitted that it may hold a long-term promise, particularly if the innovations promote a faster, more secure, and more efficient payment system.

To contact the reporter of this story: Deepak Tiwari at deepak@forexminute.com

  • Hairy

    Lets be clear. If it is legal tender you are forced to accept. All they are saying is no one is forced to accept it.