Is Bitcoin Legal In Canada? (Feb 2023)

November 24, 2022
Blog

In Canada, Bitcoin and other cryptocurrencies are perfectly legal. Bitcoin is a great way to add diversity to your portfolio, but keep in mind that any earnings you make from buying and selling cryptocurrencies will need to be taxed, so keeping records of all your transactions is recommended.

There are plenty of ways of acquiring Bitcoin in Canada, but we recommend using VirgoCX. VirgoCX is easy of use, has strong platform security, and offers the lowest trading fees in Canada, making it our top choice for Canadians investing in Bitcoin.

Is Bitcoin Legal In Canada?

Yes, Bitcoin may be bought, sold, and traded in any province of Canada. Unlike other countries where government authorities have outlawed cryptocurrencies, the Canadian government has accepted it as a legitimate investment asset.

Holding Bitcoin in a digital currency wallet and being a crypto trader in Canada is completely legal as well, whether you acquire your Bitcoins from a Canadian crypto platform like VirgoCX or buy them directly through a software wallet.

The Canadian government also permits the use of crypto, and you can transfer digital currencies as well. As a result, internet and brick-and-mortar businesses can accept digital currencies if they want to do so. This implies that many organizations are open to alternative payment technologies to make shopping easier and safer.

Is Bitcoin Mining Legal In Canada?

Considering that Bitcoin is legal in Canada, you can rest assured that Bitcoin mining is also legal in the country. There are no specific laws surrounding cryptocurrency mining, so as long as you follow the general electricity and tax regulations, you’re good to go.

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Canada may be one of the best countries for crypto mining due to its relatively low energy costs. However, keep in mind that you'll need one or more powerful computers to mine Bitcoin or any other cryptocurrency, which can cost a pretty penny.

Is Bitcoin A Legal Tender In Canada?

Although crypto assets are legal in Canada, it's worth pointing out that it's not considered legal tender. That's because the Canadian government only recognizes the Canadian dollar as the country's official currency.

Knowing the distinction is crucial for a variety of reasons: for instance, the fact that cryptocurrencies are not regulated or controlled by any central authority in Canada means that the kinds of transactions that may be completed using cryptocurrency are quite limited. Also, because cryptocurrency is not considered a legal tender, retailers are not obligated to accept it as a form of payment, and Canadians are unable to use it to pay taxes or to conduct other government-related transactions.

Additionally, cryptocurrencies don't enjoy the same legal safeguards as traditional currencies. This means that there is no federal or provincial insurance on cryptocurrency, as there would be if you kept Canadian dollars in a savings account.

However, if a merchant is prepared to take the risk, they may accept any payment type they choose, including Bitcoin. It's a similar situation to businesses along the border who accept US dollars as payment, although US dollars aren't considered a legal Canadian tender.

Is Crypto Legal In Canada?

Although Bitcoin is the most valuable cryptocurrency by market capitalization, there are plenty of other cryptocurrencies to trade in as a crypto trader. Fortunately for Canadians, the government doesn't only accept Bitcoin for digital currency transactions, but it also accepts all other cryptocurrencies.

You may trade any cryptocurrency, including the most popular ones such as Ethereum and Dogecoin, as well as lesser-known cryptos like Shiba Inu.

Bitcoin and Ethereum are kings of the cryptocurrency markets. While you may invest in smaller coins, there's a good chance that many of them will lose value.

Do I Have To Pay Crypto Taxes In Canada?

canadian securities administrators

Yes. When it comes to paying taxes, cryptocurrencies are treated like any other investment. In Canada, losses and gains must be recorded on an annual tax return and reported to the Canada Revenue Agency (CRA). According to the Canadian government, the Income Tax Act and tax rules apply to digital currencies.

According to authorities, utilizing digital currency does not exempt citizens of Canada. This implies that when Canadians submit their taxes, the Financial Consumer Agency wants them to disclose any crypto losses or gains they experience while purchasing and selling, or mining cryptocurrencies.

The Canadian government has a guide to assist taxpayers in declaring their cryptocurrencies on their tax returns. The most essential things to know are that Canadians pay taxes as capital gains or business income, depending on the circumstance.

To calculate the taxable value, cryptocurrencies must be converted to Canadian dollars. The Canadian government allows taxpayers to choose how they want to convert or value cryptocurrency for taxes, but that method must be consistent. Several online calculators may be used to convert cryptocurrencies into Canadian dollars.

It's critical to keep records whenever you buy or sell cryptocurrency, since Canadian taxpayers are required to report their gains. These records will be important when it comes time to file taxes.

How To Buy Bitcoin In Canada

To buy Bitcoin in Canada, you'll need to first set up an account with one of many cryptocurrency exchanges. These platforms allow you to buy and sell digital currency (including Bitcoin), and they also allow you to trade other altcoins for Bitcoin.

There are several platforms to choose from, but we recommend VirgoCX. Here are a few of the reasons why we recommend VirgoCX over other exchanges:

#2 In Canada

Trading Fees: 0% up to $200
Security: Best in class
Customer Support: Excellent

Top-notch security + low fees.

★★★★★

Rated 4.5/5

ZenGo is free to use, which means you get the industry's best security for no cost. Sending and receiving crypto to and from ZenGo is also free, and their 24/7 support team answers most queries in 5 minutes or less.

ZenGo’s proprietary keyless technology means that your crypto is protected by two independently created mathematical secret shares: one that lives on your phone, and another that lives in the cloud. This unique setup means that your coins are always 100% secure, and that you’ll never have any trouble accessing them, even if your phone is lost, stolen, or broken, or if ZenGo (the company) were to go bankrupt, commit fraud, or cease operations for any other reason.

As a new ZenGo user, you won't pay any trading fees on trades up to $200. ZenGo supports more than 75 crypto assets, and it takes less than 30 seconds to open your free account.

Overall, ZenGo represents the next generation of crypto: with top-level security inside an easy to use app, ZenGo offers the best of both worlds.

Features

  • Supports 75+ crypto assets
  • 24/7 customer support
  • Extremely well-rated mobile app (4.7/5 on the App Store) 
  • Face scanning technology for even greater security
  • Up to 8% APY in crypto savings 
  • Cancel or speed up your sent transactions with one tap
  • Choose from the 3 network fees modes: economy, regular, and fast (applicable for BTC, ETH, and ERC20)

Cost

  • Account Opening: Free
  • Trading Fees: 0% on trades up to $200

Best For

Crypto investors looking for the most secure trading experience + low fees.

SECURE MY CRYPTO FOR FREE
Sign up by February 3, 2023.

In Summary

Bitcoin is legal in Canada, as are all cryptocurrencies. Bitcoin is a great way to diversify your investment portfolio, but be aware that you will need to pay taxes on any gains you make from buying and selling crypto, and it'd be wise to keep records of all your transactions.

There are plenty of ways of acquiring Bitcoin in Canada, but we recommend using VirgoCX. VirgoCX is easy of use, has strong platform security, and offers the lowest trading fees in Canada, making it our top choice for Canadians investing in Bitcoin.

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