Document Type

Article

Publication Date

8-2018

Source Publication

National Banking Law Review 37:4

Abstract

The emergence of Bitcoin heralded the era of crypto and digital currencies designed for use in the general economy. But are these new currencies considered money and is current Canadian law adequate to accommodate them as money?

What You Need To Know

  • Cryptocurrency denotes a digital currency in which encryption techniques are used to regulate the generation of units of currency and verify the execution of payment transactions on a decentralized network.
  • "Money" is an element in definitions that determine the scope of a few statutes. As well, unlike property in general, money passes to a taker in good faith for value free of all adverse claims.
  • Currency legislation in Canada does not define "money." Specific statutes may focus on national sovereign money but do not restrict the meaning of the term otherwise.
  • The use of private currencies is legally recognized; however, whether a given cryptocurrency is money depends on whether its features meet the elements set out in case law and literature.
  • Hence, a general recognition of cryptocurrency as money will not be appropriate. What ought to be considered is the adoption of amendments to the Currency Act, as well as other statutes, clarifying that money need not necessarily be limited to official national currencies.

Comments

The content of the National Banking Law Review article is identical to the Torys LLP online editorial. Attached to this record is the Torys LLP online editorial.

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