Why is it so important to get an MSB license in Canada when setting up a business?
Canada is one of the world’s leading countries in regulating the cryptocurrency industry. Unlike many other countries that have not yet decided on the legal status of digital assets, the country has created a clear legal framework for their use and circulation. The key element of this system is that all companies working with cryptocurrencies and fiat money should get the MSB license in Canada, as it is among the first regulators to address the risks associated with the anonymity and decentralized nature of cryptocurrencies. Including their potential use of money laundering and terrorist financing. In 2021, regulators announced that all crypto exchanges and platforms for the exchange of digital assets must obtain a license.
How Can I Get an MSB license in Canada?
An MSB license in Canada is issued by the regulator — Financial Transactions and Reports Analysis Center of Canada after a thorough examination of the company and its business model. The process of obtaining a license includes the following stages:
- registration of a legal entity in Canada;
- preparation of a package of documents, including a business plan, anti-money laundering policy, and customer identification procedures;
- passing an online interview and filling out forms on the FinTRAC website;
- payment of the relevant fee.
Obtaining an MSB license in Canada is a prerequisite for legally conducting a cryptocurrency or payment business. Without it, the company has no right to offer services for converting digital assets into fiat money and vice versa. In case of problems with applying for such a license on their own, businesses can get the help of services, like SBSB.
The Importance of MSB License in Canada
The importance of an MSB license for cryptocurrency and payment business in Canada lies in several key aspects:
- legal status and protection from sanctions. Obtaining an MSB license legalizes the company’s activities in Canada and protects it from possible fines, blocking, or criminal prosecution for violating the law;
- Increasing the trust of customers and partners. The presence of an MSB license is a kind of quality mark that confirms the reliability, transparency, and compliance of the company with all the requirements of Canadian legislation;
- Competitive advantage. In the fiercely competitive cryptocurrency market, the MSB license in Canada gives the company a significant competitive advantage over illegal or semi-legal exchanges and platforms that are constantly at risk of being fined or blocked by regulators;
It is worth noting that an MSB license is not the only permit required to work with cryptocurrencies in Canada. If a company plans to open and store customer wallets or trade valuable digital assets, it will also need to obtain a license from the Securities Commission of the relevant province, such as Ontario.
