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www.insidehalton.com |O A K V IL L E B E A V E R |Thursday, December 21, 2017 |2 6 The gap between government and cryptocurrency a concern O ut of the wonderful world of tech nology has com e a major headache for governments around the world. Cryptocurrency has caught the imagina tion of millions. It is estimated that there are 8 0 0 cryp tocurrencies in existence. The m ost talked about today is Bitcoin. Opinions on Bitcoin are as varied as the number of people you ask. Stephen Poloz, the Governor of the Bank of Canada, told an audience at the Canadian Club Toronto last week that cryptocurrency is `closer to gambling than investing.' Others have called it the next best thing. All opinions have a story attached. This article, however, concentrates on the risk to governments. As a currency, Bitcoin and other crypto currencies are digital currencies that are not from the Bank of Canada or the Royal Cana dian Mint, it is still subject to the Canadian Incom e Tax Act. The Canada Revenue Agency expects when you hle your taxes you report any gains or losses from selling or buying digital currencies. Also, any goods or services purchased us ing cryptocurrency has to be included in the seller's incom e tax -- GST/HST also applies. For all this to happen, the government has to be aware that hnancial transactions have taken place. Enter the world of cryptocurrency where Guest Contributor transactions can be made discreetly. And where government regulators haven't regulated by governments or central banks. caught up with the technology to monitor Among other things, governments are in the encrypted digital legers of those transac tions. the business of collecting taxes. Ownership of cryptocurrencies can be vir W hile Bitcoin isn't an `official currency' tually anonymous. For the m ost part when you buy digital currency, you have to verify your identity in Canada, but you can get around that. However, if you want near-anonymity it will cost you somewhere in the neighbour hood of hve to 10 per cent extra for the privi BEF0«E SfflTO ® 1 lege. It should be noted that there are m any le gal reasons a person may want to keep their cryptocurrencies anonymous, such as be L oecembeb* TM ^ com ing a target of fraud should others know how m uch they own, but there are also many Dollars & Sense Peter Watson O N N O W A T T H E B R IC K ! b r ic k C ANADIAN p R O U O W C A N A D IA N 1971 criminal activities that fall into that category as well. There has been phenomenal cooperation between governments of countries to m oni tor hnancial transactions in order to prevent money laundering and terrorist hnancing. Money laundering is the process where funds made from illegal activity are filtered through a number of h nancial transactions to make these funds appear legitimate. It seems that virtual currency is here to stay. It is so popular at the m om ent that the Ca nadian Anti-Fraud Centre reported that Ca nadians have fallen prey to cryptocurrency scams to the tune of $ 1 .7 million in 2 0 1 7 , which is double that of 2016. There are over 3 0 0 Bitcoin ATMs in Cana da. Last m onth police in York Region report ed that 4 0 victims sent money to fraudsters using these machines. It will be interesting to watch what gov ernments do in relation to the increasinglypopular digital currency. Cryptocurrency' s black eye at the m om ent is in m oney laundering, terrorist activity, tax-evasion, and citizens being scammed. For governments, this is a major headache. it's Our Famous ssssSr ' . 2 0 /8 -- subm itted by P eter Watson, o f P eter W atson Investm ents. MBA, C FP® , R.FP, CIM, FC SI I more PADERNO SAVINGS UP TO 78%! 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