Frequently Asked Questions

Below you will find answers to some questions we get asked quite often about cryptocurrencies for Canadian residents. We hope you find the information helpful. You can also find answers about specific software and resources directly on the individual vendor websites.

General

Why are you writing this guide?

We have been interested in cryptocurrencies since 2013. Back then, there was very little information available, and it was difficult to learn how to purchase and store Bitcoin. During that time our team has gained a lot of valuable experience using a variety of different websites, exchanges, services and wallets.

Now that cryptocurrencies are becoming increasingly more popular, there is a great opportunity for individuals to participate in and benefit from the cryptocurrency industry and the innovations it brings.

As the technology evolves, each government has implemented its own rules and regulations around digital currencies, and so each country is different when it comes to how their residents can interact with cryptocurrencies. As Canadian residents, we felt it would be a good opportunity to put together a guide specific to Canadians, in the hope that it would help people take their first step into digital currencies.

We hope you find this website and Beginner’s Guide useful. We plan to add information as time goes on, so if you have any suggestions, please feel free to send us a message with your questions or ideas.

Do you have any affiliations with the companies you promote?

Other than referral links – which may earn a small amount of commission if a user signs up – we have no connection with any of the companies we mention. If we have included an exchange, wallet or piece of software on this website, it is only because we have personally used it and can speak from experience.

Is it legal to purchase cryptocurrencies in Canada?

Yes, it is perfectly legal to purchase and trade cryptocurrencies in Canada. The Government of Canada website states the following:

Using digital currencies

You can use digital currencies to buy goods and services on the Internet and in stores that accept digital currencies. You may also buy and sell digital currency on open exchanges, called digital currency or cryptocurrency exchanges. An open exchange is similar to a stock market.

However, it is worth noting that digital currencies are not recognized as legal tender in Canada.

The full article can be found on the Government of Canada website.

Can banks stop me from buying cryptocurrencies?

As per the Government of Canada website, “Financial institutions, such as banks or credit unions, don’t manage or oversee digital currency.” [link]

This would seem to indicate that banks have no business stopping you from transferring money into exchanges for the purpose of trading digital currencies, or purchasing digital currencies with your credit card.

However, there are some stories of Canadian residents having their bank accounts closed by Canadian banks. This usually happens when the individuals in question are running an unregulated business buying and selling digital currencies and are using their personal bank accounts for this purpose.

A Canadian bank should not be closing your account for purchasing Bitcoin or any other cryptocurrency on services such as QuadrigaCX, Coinsquare or Coinbase. Digital currencies such as Bitcoin are accepted at many online and offline stores today, and so it is perfectly acceptable that you would need to hold some cryptocurrency.

Do I have to pay taxes on cryptocurrency income?

Canadian residents are required to declare and pay taxes on any income earned throughout the calendar year. For example, if you bought $100 worth of Bitcoin in March, and sold it for $300 in October, you would be required to declare the $200 income on your next annual tax return, and it will be subject to tax as per the regular capital gains tax laws.

Transactions made with bitcoins or other virtual currency are covered by the section of the tax code that governs barter and trade transactions, as outlined in this Turbo Tax article.

Please note that this industry is evolving rapidly, so please make sure you check for the most up-to-date regulations. Further information can be found on the Government of Canada website.

Do I have to declare the value of my cryptocurrency portfolio?

When it comes to unrealized income, the same laws apply as with stock market portfolios. As of June 2017 there is no definitive tax law requiring you to declare the value of your cryptocurrencies held. For example, if you purchased $100 of Bitcoin in March and it was worth $400 the following February – but you had not sold it and realized a gain – there is currently no requirement to declare the value of cryptocurrency portfolio.

However, once you convert the cryptocurrency back into Canadian dollars, any loss or gain must be accounted for in your tax return.

Transactions made with bitcoins or other virtual currency are covered by the section of the tax code that governs barter and trade transactions, as outlined in this Turbo Tax article.

Please note that this industry is evolving rapidly, so please make sure you check for the most up-to-date regulations. Further information can be found on the Government of Canada website.

Where can I find more information about cryptocurrencies?

There are many blogs, forums and other online media published which discuss all the various aspects of cryptocurrencies. Please refer to the Resources tab of this website for some links to worthwhile online resources.

Ready to get started?

Read my Beginner's Guide to getting started purchasing and trading Bitcoin, Ethereum, Litecoin and other digital currencies as a Canadian resident.

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