Canada just got very cozy with Bitcoin. In an announcement today they have cleared regulatory hurdles to let individuals buy and sell Bitcoin, not just big time investment firms. Fidelity Investments has launched a Bitcoin exchange-traded fund that will allow Canadian investor to purchase Bitcoin instead of derivatives. The exchange-traded fund is listed on the Toronto Stock Exchange today under the ticker FBTC
Pressure is mounting for SEC approval of a Bitcoin Spot ETF in the U.S. so this bodes well for Canada to take leadership in Bitcoin investment while the US gets through its regulatory hurdles.
Fidelity claims that it “has been researching and investing in bitcoin and blockchain – the underlying technology – for many years and has a strong understanding of the technology, its benefits and risks and the investment potential for investors.”
In mid-November Fidelity unveiled its regulated digital asset trading and custody solution to institutional investors prompted by insights that “digital asset valuations are reaching all-time highs and increasing interest in alternatives. Canadian institutional investors are driving the demand to trade the emerging asset class on a reliable and secure platform.
“As bitcoin and digital currencies are gaining recognition among investors, we are pleased to offer a professionally managed bitcoin ETF and ETF Fund supported by the strength and scale of Fidelity.”
Kelly Creelman, Senior Vice President, Products and Marketing, Fidelity Investments Canada ULC
Under the Bank of Canada Act, cryptocurrency is not considered legal tender in Canada. Therefore, from a tax perspective, the asset is treated as a commodity, rather than “money”. Under securities laws, Canadian crypto exchanges or “tokens” are classified as securities and are subject to securities requirements.
Fidelity cleared regulatory hurdles to become Canada’s first institutional Bitcoin custodian, but is limited to institutional investors for the demand to launch a Bitcoin ETF that would cater to retail traders and individual crypto currency investors is in high demand in the country.
“The demand for investing in digital assets is growing considerably and institutional investors have been looking for a regulated dealer platform to access this asset class.”
Scott Mackenzie, President of Fidelity Clearing Canada
