Is it legal to mine cryptocurrency in Canada?
There has been a mass exodus of cryptocurrency miners from China ever since the country started cracking down on crypto businesses and ordering energy companies to cut the supply of power to crypto farms.
Where are they going in their search for reliable, abundant power and strong property rights and legal protections? Many have headed to more crypto-friendly pastures in Canada, where governmental regulators have mostly taken a “hands off” approach to these power-intensive yet extremely profitable operations.
To give you an idea of Canada’s position in the crypto mining world: nearly 10 percent of the world’s Bitcoin was mined in Canada in August 2020, according to data from Cambridge University.
Though it’s still technically legal in Canada at this time, some official bodies have started to consider laws or policies that address cryptocurrency mining. And some provinces make it easier than others.
What is crypto mining?
Put simply, crypto mining is the process of gaining cryptocurrencies as a reward for solving puzzles that serve to validate cryptocurrency transactions on a blockchain network and add them to a distributed ledger. Yes, that is the simple explanation.
It’s a power-intensive process that requires computers with special software designed to solve complicated, cryptographic mathematical equations.
It can be extremely profitable. The global cryptocurrency mining market is expected to surpass $49 billion Canadian by 2025, according to data from Coherent Market Insights.
The big question: Is it legal?
Yes, cryptocurrency mining is legal in Canada. But each province has its own regulators and power authorities to contend with.
In Quebec, where a lot of crypto mining takes place, Hydro Quebec has expressed concern about the “sudden and highly intensive electricity consumption of the cryptocurrency mining industry,” especially during winter months, as it could lead to power shortages and impact other clients’ ability to heat their homes. In fact, in early 2021, Quebec asked crypto miners to lower their energy consumption by 95 per cent for up to 300 hours in the winter.
Alberta’s another hotspot due to its abundance of cheap gas. But miners should be sure to seek approval from the Alberta Utilities Commission first. One company is currently facing a $7.1 million fine for secretly operating in a power plant.
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