Image courtesy @KittyBitcoin
Vancouver Island, Canada
Mainland Chinese use bitcoin to move capital out of China
Following the August 2015 devaluation of the Chinese yuan Goldman Sachs calculated that mainland Chinese moved about $200 billion out of China. In January 07 2016 monetary changes by the Peoples Bank of China – 0.51 percent yuan devaluation to 6.5646 against the US dollar – coincided with some of the highest volumes in BTCCNY – bitcoin paired with Chinese yuan. @BraveNewCoin reports that Saturday January 16 trades of 4.9 million BTCCNY are the pair’s highest 2016 volume to date:
Chart courtesy @BraveNewCoin
Chinese want to bring capital into other countries like Canada
Chinese want to bring capital to other countries like Canada. The problem of getting legitimately earned income out of China is not new. In November of 2011 china-briefing.com in their article “Getting Cash Money RMB Out of China” stated “China employs strict currency regulations that are designed to prevent large amounts of currency moving out of the country.” On January 14 2016 Bloomberg BusinessWeek ran the headline “Money is pouring out of China as rapidly as it once poured in.” Some observers believe that bitcoin is ideal for moving larger amounts of capital as long as you can spend it or convert into cash at the Canadian end.
Image courtesy Pixabay.com
Carry cash for immediate needs, use Bitcoin ATMs for the rest
It makes sense to carry just enough cash for your immediate needs, and to exchange bitcoin for Canadian dollars as needed at local bitcoin ATMs. This way you avoid most of the cross border pitfalls of bringing cash – plus you can withdraw only as much cash as you need. Avoid the hefty foreign exchange fees.
Perhaps the only downside is you’ll need to exercise some patience waiting for the ATM to receive blockchain confirmations. Wait times at one British Columbia bitcoin ATM were observed as 20 minutes for your cash. Your mileage may vary.
Vancouver British Columbia Canada bitcoin ATM locations
Image courtesy CoinATMRadar
Vancouver is the home of the world’s first bitcoin ATM. At the time of writing there are 9 locations exchanging bitcoin to fiat. One ATM in Richmond is closest to YVR Vancouver International Airport:
Image courtesy CoinATMRadar
Connect with Bitcoiniacs directly on their website: http://www.bitcoiniacs.com/. The Skytrain commuter rail system puts other ATMs in reach too.
Lack of capital controls
There is a huge flow of Chinese capital from China into Canada. Wealthy Chinese move their funds by cash into Canada, sometimes for schooling of their children, sometimes for real estate investment, and other lawful activities. These are entirely “okay” activities. The Government of Canada does not place restrictions on the capital you bring into Canada – provided your cash is legally sourced.
Possible issues bringing cash across the Canadian border
According to informed sources only one to five percent of all the Chinese cash brought into Canada is declared to Canadian border officials. The flip side is that over 95% is NOT declared.
This number of undeclared cash assets is surprising. According to Canadian law, visitors to Canada may bring in any amount but they must declare it. For example, if you brought CDN$ 100,000 in a suitcase that would be no problem – as long as you declared it to Canadian Customs officials at the point of arrival in Canada, and that your cash was lawfully sourced.
Official focus on Anti money laundering (AML)
The concern of Canadian border officials is that your funds are lawfully sourced. Anti Money Laundering (AML) legislation in Canada was recently tightened in light of so called “terrorist” activities. The legal wording is stringent.
Large cash transfers
If you are bringing in a large amount – for example over $10,000 – then you must be prepared to supply proof of source. You may be required to prove that your funds are not obtained by illegal means. Ways of proving the source of your cash could be a bank statement, an inheritance will, or a valid official or verifiable document showing the source of the cash amounts declared on arrival.
Typically it would make sense to buy bitcoin in China, then use an ATM on your arrival in Canada to withdraw cash from your bitcoin account. However situations like students temporarily moving to Canada for school, their need to buy cars, buy condos and what have you – these may legitimately require the transfer of cash from one point in China to another point in Canada. These types of activities are normal, expected, and entirely legal in Canada.
Locate your bitcoin ATM before you leave
Coinatmradar.com tells us there are plenty of other places to exchange bitcoin for cash in Canada besides Vancouver:
City / # of bitcoin to fiat ATMs
Calgary, Alberta 4
Toronto, Ontario 9
Montreal Quebec 7
+ ATMs in other cities
Data courtesy CoinATMRadar
Dearth of bitcoin ATMs in Eastern Canada
At the time of writing there are no bitcoin ATMs in Newfoundland, which as the most easterly point in Canada is the trans-Atlantic stopover point for many international flights. Halifax Nova Scotia has only two; one of unknown fees at the university and the other only does fiat to crypto. Your best bet if arriving in Eastern Canada is to fly in to the crypto to fiat ATMs in greater Montreal, or metro Toronto.
Know the bitcoin rate you will pay beforehand
Make sure you scope out your planned ATM stop well in advance, and have a backup location in case the ATM has moved. It’s also a good idea to know exactly what the withdrawl rate is at the exact bitcoin ATM you will use. The rates vary considerably – there’s no point paying more than you have to – and different ATMs could have different maximum daily withdrawl amounts.
If you’re withdrawing a large amount you could save by connecting with the local ATM provider beforehand and doing an over the counter trade, bitcoin for Canadian dollars, once you’re in the country.
Not using bitcoin? Potential consequences
If you’re not using bitcoin there are possible consequences of bringing cash and not declaring it:
- funds could be seized
- subject to a $250 fine
- sent back to originating country, or country of birth
- asset seizure under AML
If you do NOT declare the amount of cash you have on arrival in Canada, your funds could be seized by Canadian border officials, you could be subject to a fine, and in a worse case scenario you could be sent back to your country of origin or your country of birth. If you cannot prove your funds were lawfully obtained they could be lawfully seized as proceeds from unlawful gains, based on Canadian anti money laundering (AML) legislation.
The fine for not declaring cash to Canadian border officials is currently CDN$ 250. After you pay the fine in most cases your cash is returned to you – if you can prove it is lawfully obtained.
There is some discretion in how these matters are handled. There are many possible variables including how many trips you have previously made to Canada, whether you are working or going to school, and whether you have previously run amok of the system on entry.
A foreign national requesting entry has no rights
As a foreign national requesting entry you have no Canadian rights at the border. You will be totally at the mercy of border officials. It does make sense to cooperate with officials and to declare your cash assets on arrival. If you are arriving as a visitor, and are a non Canadian, then your status at the border is of a foreign national requesting entry to the country. Canadian officials have every right to turn you back, even if they only have reasonable grounds to believe that you are not being truthful. In essence, the officials have all the cards, and you have almost none. But you DO have a bitcoin wallet, don’t you?
Mobile phones source of information
Canadian border officials can detain you on arrival for many hours. Officials may ask to see the contents of your mobile phone. If you refuse, depending on the circumstances, that could be grounds for reasonable belief that you are withholding information and or not telling all the truth. In an extreme case you might be put on a blacklist for seven years. It won’t be easy to get in that way.
There is, however, NO requirement that you disclose the private keys or passwords to your privileged assets if they do not come with you. Your personal financial assets are legitimately confidential information. If your assets are not physically crossing the border with you, then their existence is typically not a concern of overworked border officials.
Your bitcoin wallet is as safe as a numbered bank account in Switzerland – actually safer since only you have the keys to your bitcoin wallet.
No communication over capital movement
There is no material communication between Canadian border officials and their border counterparts in foreign countries. For example, if funds are legitimately sourced, a Canadian border official will not tell Chinese border officials what funds Chinese nationals do or don’t bring into Canada. They don’t care. Canadian border officials do not care what the status of your funds is in China.
Canadian interest in your cash starts and ends with AML
Canadian officials are concerned that your funds are lawfully sourced. If you bring a large amount of cash you may be required to prove that the funds are lawfully obtained. Whatever the cash export controls are in your originating country are immaterial, irrelevant, and are not a consideration of Canadian officials who are primarily tasked with AML duties.
Bureaucratic issues of moving cash internationally
We’ve seen that going the traditional route of carrying cash between countries can have problems:
- export controls at the source country
- cash conversion & routing fees for negotiable instruments & bank account transfers
- border paperwork and interrogation at the destination
- possible hours of detention at the destination
- possible fee
- possible deportation
- possible blacklisting
Got a bitcoin debit card?
One other way to move money internationally is to use a bitcoin debit card. The BTC debit card gives you even more flexibility than a bitcoin ATM with the comfort of a known reliable card. Make sure you check that your bitcoin debit card can be used in most point of sale (POS) systems. Not all cards are created equal – some cards have better network accessibility than others.
Advantages of traveling with bitcoin
The huge advantage of traveling with bitcoin is that you can completely avoid almost all of these possible issues – and arrive with your bitcoin intact. Actually there’s another plus – you save on foreign currency exchange expenses. Your only fee is the ATM exchange fee. Plus withdraw only as much as you need and enjoy the benefits of bitcoin:
- completely avoid almost all possible border issues
- arrive with your bitcoin untouched & intact
- save on foreign currency exchange fees
- withdraw only as much as you actually need
Carry only as much cash as you immediately need. For the rest, use a bitcoin ATM machine or bitcoin debit card to enjoy the many benefits of bitcoin.
“Have a nice visit eh?“