British Columbia is examining whether it should be regulating so-called “money services businesses,” which include a wide range of alternative financial firms, including virtual currency firms and money transfer services.
The provincial government issued a consultation paper that explores whether it should regulate the money services business (MSB) sector and the potential implications of regulating MSBs.
The paper pointed to money laundering risks, consumer protection issues and possible solvency and systemic risks as reasons for considering provincial regulation of the sector.
According to the paper, there are currently over 900 money services businesses in Canada, which handle approximately $39 billion per year.
While these firms must register with the federal anti-money laundering agency, the Financial Transactions and Reporting Analysis Centre of Canada, the paper noted that there’s no provincial regulatory framework, which puts these firms “at risk of being used to launder dirty money.”
The government said that its consultation represents “another step forward” in its efforts to combat money laundering in B.C., which have also produced ongoing consultations on creating a central registry of beneficial ownership and modernizing mortgage-broker legislation.
The deadline for responses to the consultation is April 17.