Frequently Asked Questions

Below you will find answers to some questions we get asked quite often about buying bitcoin as a Canadian resident—and the Bitcoin protocol in general. We hope you find the information helpful. You can also find answers about specific software and resources directly on the individual vendor websites.

General

What is the purpose of this guide?

We have been interested in Bitcoin 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 Bitcoin is becoming increasingly more popular, there is a great opportunity for individuals to participate in and benefit from the Bitcoin 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 bitcoin. 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 towards wealth security.

We hope you find this website and Bitcoin 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 software on this website, it is only because we have personally used it and can speak from experience.

Is it legal to purchase bitcoin in Canada?

Yes, it is perfectly legal to purchase and trade digital currencies 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 bitcoin?

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 buying digital currencies, or purchasing digital currencies with your credit/debit card.

However, Canadian banks do charge cash-advance fees for buying bitcoin with a credit card. Also, 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. Everyday purchasing of bitcoin is not illegal.

A Canadian bank should not be closing your account for purchasing bitcoin on websites such as Bull BitcoinQuadrigaCX, 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 bitcoin.

Do I have to pay taxes on bitcoin 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 $150 in October, you would be required to declare the $50 income—less any fees—on your next annual tax return, and it will be subject to tax as per the regular capital gains tax laws.

Similarly, earning bitcoin from employment is taxed as regular income the same as if you earned fiat (CAD). It must be accounted for in your annual tax returns.

Transactions made with bitcoin 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 with a registered CPA 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 digital currency portfolio?

When it comes to unrealized income, it appears that the same laws apply as with stock market portfolios. As of January 2019 there is no definitive tax law requiring you to declare the value of your digital currencies held. For example, if you purchased $100 of bitcoin in March and it was worth $150 the following February–but you had not sold it and realized a gain–there is currently no requirement that we are aware of that requires you to declare the value of that digital currency.

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

Transactions made with bitcoin 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 digital currencies?

We endeavour to promote Bitcoin and offer as much advice as possible on this website. There are many blogs, forums and other online media published which discuss all the various aspects of digital currencies. Please refer to the Resources tab of this website for some links to worthwhile Bitcoin resources.

Ready to get started?

Read our Bitcoin Beginner's Guide to getting started purchasing and using bitcoin in Canada.

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