Bank of Montreal Open to Rekindling Partnerships with Bitcoin Businesses

Pete Rizzo
Apr 2, 2014 at 21:49 UTC
Updated Apr 3, 2014 at 14:16 UTC

The Bank of Montreal, one of Canada’s ‘Big Five’ banks and the fourth largest in the country, issued new statements on 1st April suggesting that it may be open to working with bitcoin businesses again, provided it receives regulatory clarity from the nation’s lawmakers.

The comments were made by CEO Bill Downe as part of an interview at Bank of Montreal’s annual general meeting in Toronto this week.

Speaking to his company, Downe said:

“If you wanted a Swiss franc transaction or a Japanese yen transaction or a US dollar transaction, we can do that for you. If bitcoin [can be] a reliable medium of exchange, then at that point in the future, we would be able to [conduct business] with bitcoin.”

The comments are particularly noteworthy, however, given that Bank of Montreal abruptly cut ties with Vancouver-based bitcoin exchange Cointrader in February.

This decision, according to Cointrader, was part of a larger move by Bank of Montreal to end relations with all of the bitcoin businesses it served. At the time, Bank of Montreal did not comment publicly as to whether it had plans to freeze all of its bitcoin customer accounts.

Past bitcoin relationships

While the news has been positioned as if Bank of Montreal is looking to perhaps enter the bitcoin market, talks with major Canadian bitcoin businesses reveal it already has a history of working in the sector, one that changed earlier this year amid increasingly harsh government rhetoric.

A spokesperson for Toronto-based bitcoin exchange Vault of Satoshi told CoinDesk that it is no longer working with Bank of Montreal, though it said the bank was “nothing short of fantastic” while they were in business together.

Said the representative:

“While we were working with the Bank of Montreal, they changed their stance on bitcoin related-business recently and decided to halt their operations in that field until there is further regulation; not much unlike our decision to temporarily withdraw our US operations.”

A representative from Cointrader indicated that the recent statements from the Bank of Montreal CEO were consistent with responses it received from the banking provider:

“They wanted to wait for clarification on regulation. But, the problem is, how long does that take? It could take years.”

He added that he believes Bank of Montreal is no longer working with bitcoin businesses, but that at one point, it was the go-to bank for such services.

Regulation in Canada

Notably, the news follows a report last week from The Ottawa Citizen, which stated that the latest version of Canada’s 2014 Federal Budget Implementation Act included new directives regarding digital currencies.

The budget act, if passed would require “dealers of virtual currencies, such as Bitcoin, to report suspicious transactions, or those over $10,000, to a government watchdog”.

Canada has been rumoured to be working on regulating digital currencies, however, Finance Minister Jim Flaherty, the official who was perhaps most active publicly on this front, resigned on 18th March.

Promising signs

Despite the tough talk on the regulatory front, Canada’s digital currency community has seen some encouraging signs recently that may signal less aggressive regulation will be forthcoming. For example, on 26th March, Vault of Satoshi received its full money services license.

Furthermore, the local industry is showing it has been able to innovate even in the face of challenges.

Vault of Satoshi announced its coin-to-coin trading system on 2nd April, which allows users to trade altcoins directly without first converting to litecoin or bitcoin, while PocketPOS launched a new merchant-friendly point-of-sale tool meant to increase merchant adoption of bitcoin.

Montreal at dusk image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.