The era of blockchain technology reshapes the world of business and makes transformations in the older order of human affairs. Now anything of value can be stored, ranging from money and stocks to art and votes. The revolutionary wave encompasses not only financial industry but also artificial intelligence, autonomous vehicle and the Internet of Things. Experts predict Canada will be one of the leading blockchain and crypto nation and here is why.
Canada – Center of Blockchain Innovation
Canada’s dominance in blockchain innovation is largely associated with Toronto being home of Vitalik Buterin who is the inventor of the Ethereum Blockchain. Ethereum Blockchain is an open source public platform featuring smart contracts. These smart contracts are very popular these days. Ethereum Virtual Machine designed to execute such contracts can be used to automatically conduct transactions with revolutionary implications for finance industry.
Last year Enterprise Ethereum Alliance (EEA) was launched in Canada. EEA “serves as the connective tissue between Ethereum Blockchain and the evolving enterprise industry with over 450 members from all around the world,” Ron Resnick, Executive Director of the Enterprise Ethereum Alliance said.
Another predominant blockchain institution based in Toronto is Blockchain Research Institute which currently runs over 70 research projects that propose ways to which Blockchain technology can be utilized.
Canada Offers Low Electricity Rates for Cryptominers
For a Bitcoin mining business to be profitable, there are two primary conditions – cheap electricity and cold climate. Canada currently offers the lowest electricity rates in North America which attracts cryptominers to the region. Quebec, Manitoba and British Columbia have attracted the attention of a lot of Bitcoin mining firms. It takes on average 29.05 TWh annually to operate a cryptocurrency mining operation in Quebec. That makes up about 0.13 percent of total global electricity consumption.
Although Quebec increased energy prices recently, Canada remains one of the attractive spots for cryptominers. The CEO of Hut 8 Mining Corp recently set up his company in Drumheller, the “dinosaur capital of the world,” saying “because electricity is our highest cost, we become energy hunters. We find the cheapest sources of energy, put a container down, plug it in and start mining.”
Canada Offers Favorable Regulatory Regime for the Bitcoin
Canada offers a wide range of government incentive for startup tech companies. This year Canada’s first Blockchain exchange-traded fund began trading on the Toronto Stock Exchange. The British Columbia Securities Commission approved Canada’s first registered cryptocurrency investment fund allowing pension, investment, and venture capital funds to invest in cryptocurrencies and tokens.
Canada also provides various Research and Development tax incentives. Canadian Revenue Agency characterized cryptocurrency as a commodity subject to taxation either as business income (fully taxed) or capital gains (50% taxable). In situations when cryptocurrency is held as a capital asset, the gain is considered as capital gain and is taxed as such.
There are two schemes for the mining of cryptocurrencies – either as a business or a personal hobby (non-taxable).
The boost of blockchain innovations, low electricity rates and favorable regulatory regime position Canada as one of the cryptocurrency superpowers, followed by the U.S. and UK. The three superpowers are emerging as the blockchain leaders while most countries tend to crack down on the cryptocurrency dealings. With experts predicting that Bitcoin will hit $250,00 by the year 2022, Canada is inspiring a leading role in the world industry.