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 a plethora of methods to acquire Bitcoin in Canada, but we recommend using CoinSmart. Given its simplicity of use, safety, and the fact that it offers among the lowest trading fees across most crypto platforms in Canada, we think it's one of the best alternatives for people wanting to invest 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 CoinSmart 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.
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.
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?
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 using CoinSmart. Here are a few of the reasons why we recommend using this platform over other alternatives:
Introducing CoinSmart: Canada’s #1 Crypto Platform
Trading fees: 0.2%
I recently broke down 10+ of Canada’s most popular crypto platforms, and CoinSmart came out on top. It scored so well because it excels on what I believe are the three most important factors when choosing a crypto platform: fees, security, and customer support.
Here’s how CoinSmart performs in each of those areas, and why I believe it's the best crypto trading platform in Canada. And to get your $50 signup bonus with CoinSmart, use this signup link and the special promo code YOREOYSTER.
#1 Lowest Fees In The Industry
CoinSmart’s trading fees are just 0.20%, the lowest of any crypto platform in Canada. And those savings add up quickly: if you trade $100,000 worth of Bitcoin in a given year (buying and selling $25,000 worth twice), you’ll save $800 in trading fees compared to a platform that charges 1% ($200 vs. $1,000).
Perhaps more important than trading fees, though, are spreads: the difference between the Buy price and the Sell price. CoinSmart has razor-thin spreads, which makes day trading possible and keeps more money in your pocket.
#2 Bank-Level Security
CoinSmart maintains a 95% cold storage policy, which means at least 95% of its users’ crypto is always held offline. This is a security measure that only the most advanced trading platforms employ, and CoinSmart is leading the charge.
CoinSmart is also the only publicly traded crypto platform in Canada, which means it’s subject to far more financial scrutiny than any other platform. It’s regulated by FINTRAC (the Financial Transactions and Report Analysis Centre of Canada) and the OSC (Ontario Securities Commission), it's an official member of the anti-money laundering group TRUST, and its financials are audited by external professionals at least once per year.
#3 Excellent Customer Support
CoinSmart offers 24/7 customer support via phone, live chat, and email, and their customer service reps are actually helpful rather than just following a script. I’ve never had to wait more than about 60 seconds on hold, and they’re very responsive via live chat and email, too.
The only time I ran into an issue with CoinSmart, I called them and had it sorted out within 5 minutes. Keep in mind that telephone and live chat support is only available for registered users, so if you have a question for CoinSmart, the best way to get it answered is to open an account.
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 many ways you could get your hands on some Bitcoin in Canada, but we recommend using CoinSmart. Considering its ease of use, its security, and the fact it has the lowest trading fees across most crypto platforms in Canada, we believe it's one of the best options for those looking to invest in Bitcoin.