Opportunities are exciting from the cryptocurrency space in the larger Fintech world, but it tends to be complex with a labyrinth. Companies aiming to do business in the realm face licensing requirements and obstacles to compliance that are akin to a maze. The article focuses on the comparative analysis of MSB registration in Canada—between a combined and an alternative approach for VASP authorisation and PI authorisations—under the EU framework.
As such, registration in Canada provides an intriguing option for businesses considering both Canadian and EU operations. For businesses, registration in Canada as an MSB may consolidate compliance requirements, hence bringing cost savings. Registration as an MSB covers a whole lot of financial instruments and, for most activities related to cryptocurrencies, potentially does away with the requirement for separate VASP authorisations in the EU, depending on the service offered. This would be especially beneficial for firms operating across jurisdictions, as it would then reduce costly and administratively burdensome requirements for full compliance with multiple regulatory regimes.
Thus, it all depends on the specific services the company intends to offer versus the benefits of authorisation as a VASP or PI. Authorisation as a VASP may be an option for companies that deal exclusively with crypto assets. However, for businesses that plan to provide a combination of payment and crypto asset-related services, it may be necessary to obtain PI authorisation instead of or along with VASP authorisation. Remember, this is only an attempt at a high-level comparison. Always consult legal experts specialising in fintech regulation to find the best solution for your business requirements.
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According to the FINTRAC annual report, by March 31, 2022, there were 2,465 MSBs registered with FINTRAC in Canada.
According to the official registers of EU member states, there are approximately 2,400 officially registered cryptocurrency companies (VASPs) operating in the EU.
Analysis of the Permitted Activities of European VASP and Canadian MSB registrations
While the European VASP is exclusively a cryptocurrency authorisation, the MSB is a combination of cryptocurrency and payment authorisations.
| Canadian MSB | European VASP |
| 1. Foreign exchange dealing (for example, exchange of £ for $) | 1. Crypto to fiat exchange (for example, exchange of $ for USDT or Bitcoin) |
| 2. Money transferring/Remitting or transmitting funds | 2. Crypto-to-crypto exchange (for example, exchange of USDT for Bitcoin) |
| 3. Dealing in virtual currencies (includes 1, 2 and 3 permitted activities for Polish VASP) | 3. Brokering in exchange (Assisting in transactions between users) |
| 4. Crowdfunding platform | 4. Сustody services (crypto) |
| 5. Payment service provider | |
| 6. Issuing or redeeming money orders, traveller’s cheques, or anything similar. |
Fintech Harbor Consulting LTD is a world-leading service provider when it comes to obtaining a crypto license and regulatory compliance for Fintech businesses. They may lead you through all the MSB registration issues and assist your business in becoming compliant with every law in every aspect without exception.
