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Canada continues to tighten its rules around the digital asset sector, with the government announcing it plans to ban BTC and other digital currency ATMs, a few days after a bill proposing a ban on digital currency donations to political parties passed a second reading in parliament.
- Canada moves to regulate the digital asset sector
- New legislation targets digital currency ATMs
- Proposed ban on political digital currency donations
Digital currency ATM ban
Canadian Prime Minister Mark Carney unveiled his spring economic budget update on April 28, in which the government committed itself to combating financial crime. The campaign includes introducing legislation to establish an independent Financial Crimes Agency, with police powers and civilian leadership, measures to protect money services businesses from illicit activity, and a proposed ban on digital asset ATMs.
“To protect Canadians by shutting down a primary method for scammers to defraud victims and for criminals to place their cash proceeds of crime, the Spring Economic Update 2026 proposes to ban crypto ATMs,” said the government.
Digital currency ATMs have been the subject of increased scrutiny recently, with countries across the globe cracking down.
In the United Kingdom, since January 2021, operating a digital currency exchange or a digital currency ATM is illegal without registering with the Financial Conduct Authority (FCA), the U.K.’s top finance sector watchdog. However, the FCA has yet to approve a single registration for a digital currency ATM, amounting to an effective ban, and in the meantime, it has been busy shutting down ATMs operating unlawfully; by July 2023, it had already shut down 26 machines nationwide without a license.
Across the pond, last February, United States Senator Dick Durbin (D-IL), Ranking Member of the Senate Judiciary Committee, introduced the Crypto ATM Fraud Prevention Act, which would, amongst other measures, prevent new users from spending more than $2,000 daily or $10,000 over a 14-day period at digital currency ATMs, and require live, verbal confirmation for any transaction greater than $500.
Australia and New Zealand have also taken action in the past year, with the former putting digital currency ATM operators on notice last April over a lack of anti-money laundering and countering the financing of terrorism (AML/CFT) checks, followed by the latter announcing an outright ban on digital currency ATMs in July.
In each case, similar concerns about illicit finance, money laundering, fraud, and scams were raised by lawmakers and regulators, with Canada’s government just the latest to target the perceived risk posed by these entities.
Donation ban
Canada’s proposed digital currency ATM ban followed hot on the heels of a bill proposing a ban on digital asset donations to political parties, passing a second reading in the country’s House of Commons last Friday.
The ‘Strong and Free Elections Act’ was introduced by the government as part of a raft of measures aimed at strengthening and protecting elections from “evolving threats” and foreign interference.
Such fears are not unfounded; a 2022 declassified U.S. intelligence assessment estimated that Russia alone had spent over $300 million since 2014 to influence politicians across 24 countries, with more likely going undetected.
To combat such threats, the Strong and Free Elections Act proposes a host of updates to the Canada Elections Act (CEA), which sets the rules for how elections are run and overseen in the country and already contains mandates on political financing, strict spending limits, and robust reporting requirements.
The proposed bill would strengthen some of these existing provisions, while adding new protections to adapt to emerging challenges, including a mandate that “political parties and third parties (for political activities) will no longer be allowed to accept donations in forms that are difficult to track, like crypto currency, money orders, and pre-paid cards.”
In the same way that Canada’s digital currency ATM fears are clearly shared by countries around the world, so too is an increasing focus on donations to political parties, not unique to the North American nation.
A week before Canada’s new election bill was introduced, the U.K. government announced an emergency ban on digital asset donations to political parties, as part of a broader overhaul of the country’s political finance system, also aimed at preventing foreign interference in domestic politics.
U.K. Communities Secretary Steve Reed said at the time that the moratorium on digital currency donation would “remain in place until the Electoral Commission and this Parliament are satisfied there is sufficient regulation in place to ensure full confidence and transparency in donations being made [in this] way subject to parliamentary approval.”
Several other countries and jurisdictions have already prohibited digital currency donations, including Ireland, Brazil, and several U.S. states, such as Washington, which capped digital currency donations at $100.
Canada’s proposed bill will now go to the committee stage to be examined further and possibly amended—if needed—but having passed a second vote in the House of Commons, it is likely to eventually come into law in broadly the same form, adding Canada to this growing list of countries that prohibit or limit crypto donation.
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