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Current State Of Blockchain In Canada
Canada has a strong regulatory framework, yet blockchain adoption remains modest.
Only 0.3% of Canadian businesses used this technology in 2021. However, medium and large enterprises showed more interest between 2019 and 2021.
MSBs in Canada can reverse this decline by offering cryptocurrency exchanges and other virtual transactions to customers. The use of blockchain is also increasing in 2025.
Popular Blockchain Networks
Several prominent networks and companies shape Canada's blockchain landscape. Ethereum stands out after its change to proof-of-stake, which reduced its energy consumption by 99.94%.
Canadian blockchain companies focus on:
- Smart contract development and decentralized applications
- Tokenization and distributed ledger solutions
- Blockchain integration for enterprise systems
Market size and growth
A KPMG survey showed that use of cryptocurrency in Canada increased in 2023. The country’s digital market also generated revenue of $1.7 billion in 2024.
These projections will grow steadily to an annual revenue of $2.4 billion by 2028. The figures show that cryptocurrency in Canada has high business potential.
MSBs can leverage these statistics by offering virtual currency services. You can obtain a FINTRAC cryptocurrency license to ensure your business is legal.
Maintaining compliance will help you avoid sudden regulatory audits. Understanding laws surrounding cryptocurrency in Canada for MSBs is also helpful.
Canada is becoming an important hub for digital currency mining. Blockchain technology may be in its initial stages in the nation, but 25% of cross-border MSB transactions will occur in 2025.
Cryptocurrency In Canada Implications For MSBs
About 15% of MSBs in Canada offered cryptocurrency services in 2023. This figure doubled in 2025.
The rise of cryptocurrency in Canada is expanding growth opportunities for MSBs. New businesses are registering for FINTRAC cryptocurrency licenses along with their MSB registration.
Changes Your MSB Will Face
Canadian MSBs face various challenges when operating their business in the nation. You need to file for MSB registration with FINTRAC.
Your company must also include compliance policies for AML and KYC requirements. If your MSB starts offering crypto Canada, you’ll have to get additional FINTRAC licenses.
When offering cryptocurrency services in Canada, you must also adhere to specific reporting requirements. Overall, offering cryptocurrency services will increase your MSB’s compliance demands.
However, the growth and revenue opportunities of FINTRAC cryptocurrency services outweigh its compliance burden.
New Revenue Opportunities
Cryptocurrency in Canada has enhanced revenue opportunities for MSBs. You can provide more offerings to local and foreign clients. These services can include:
- Canadian crypto exchange for fiat money and vice versa
- Transfers between different cryptocurrencies
- Cryptocurrency withdrawals and deposits management
Risk Of Cryptocurrency Exchange For MSBs
Every Canadian organization has to pay about $6.7 million for every data breach their company faces. MSBs face this financial burden if they don’t maintain strict privacy measures.
If you don’t ensure your Canadian crypto transfers occur through secure channels, you may suffer from a data breach. This is why you must always consider whether you can offer your cryptocurrency customers high security.
Otherwise, you may have to spend millions every year to recover from data breaches. MSB-related suspicious transaction reports are also increasing, according to FINTRAC.
When offering cryptocurrency exchange services, you must choose your clients wisely. If you notice any suspicious transaction, report it right away. Hiding such exchanges will only create trouble for your MSB due to non-compliance.
Cryptocurrency In Canada: Future Growth Opportunities For MSBs
Canadian MSBs looking to expand their services will find promising opportunities in blockchain technology's rapid advancement.
The House of Commons committee has revealed blockchain's potential to generate substantial economic growth and create jobs in sectors of all sizes.
If your MSB can implement reliable cybersecurity measures to offer customers high confidence, you can enjoy extensive growth.
Expansion strategies
Canadian MSBs with forward-thinking approaches are taking multiple steps toward growth:
- Creating controlled environments for blockchain experimentation with flexible regulations
- Promoting partnerships between government, industry, and academia
- Supporting blockchain education through university programs
You can also enhance your company’s credibility worldwide by the Retail Payment Activities Act (RPAA) registration. MSBs working as payment service providers are required to register with the Bank of Canada under the RPAA.
Cryptocurrency In Canada: Tax Implications For MSBs
MSBs offering crypto exchanges must adhere to various tax obligations. Non-compliance with tax laws will get you in trouble with the Canadian Revenue Agency (CRA).
- Income Tax Obligations
Cryptocurrency in Canada is classified as taxable property according to the CRA. If you perform crypto exchanges for customers, the transaction will be 100% taxable.
- GST Requirements For MSBs
Cryptocurrency MSBs must register for GST if:
- Their global service fee exceeds $30,000 in one quarter or over four consecutive quarters
- They facilitate crypto asset sales through an intermediary
If your MSB’s global taxable supplies don’t exceed the $30,000 limit, you may be exempt from GST registration.
- Cryptocurrency Record-Keeping Obligations
MSBs must keep records of various FINTRAC cryptocurrency services or exchanges. These include:
- Large virtual currency transaction records
- Virtual currency transfers of $1,000 or greater
- Cryptocurrency exchange tickets
Your MSB must keep records of all these transfers for at least seven years. If the CRA or FINTRAC conducts an audit of your company, they will require these records.
Failure to provide specific records on time can cause your MSB to suffer financial penalties and other consequences.
FAQs
What Is A MSB In Crypto (Canada)?
A MSB in crypto (Canada) is a company that transfers, exchanges, or converts cryptocurrency. The digital currency can be Ethereum, Bitcoin, or some other coin.
Do Cryptocurrency Dealers Require a FINTRAC MSB License?
Every cryptocurrency business in Canada must register as an MSB with FINTRAC. This rule also applies to dealers engaging in virtual currency transfers.
How Should A Cryptocurrency MSB Perform Risk Assessment?
A FINTRAC cryptocurrency MSB should follow a risk-based approach for assessing its AML risks. This means they should assess their client relationships and delivery channels to understand risks and mitigate them.
Contact Renno Co. & Fintech To Understand Cryptocurrency In Canada, Implications For MSBs
Handling cryptocurrency transactions requires MSBs to follow additional compliance laws. You must also fulfill crypto exchange licensing requirements.
Navigating these things can be difficult without a fintech professional. Luckily, we can help. Renno & Co. Fintech experts have vast knowledge about cryptocurrency in Canada for MSBs.
We can help you understand the implications and growth opportunities your business will face when dealing in crypto exchanges. Our experts can develop a compliance program to help you set up your MSB.
We can also help you fulfill FINTRAC MSB crypto license registration requirements. Contact us today to learn about crypto Canada implications and tax obligations.
