As a Canadian, if you have ever considered buying bitcoin, you have probably asked yourself this question: ‘Is it legal?’
The answer, reassuringly, is yes. It is perfectly legal to purchase and trade bitcoin in Canada. The Government of Canada website has a page dedicated to digital currencies which 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.
It couldn’t be any clearer than that. As a Canadian resident, you are free to purchase, trade and spend Bitcoin anywhere you can find that will accept it. This provides the necessary peace of mind for anyone considering adding bitcoin to their investment portfolio, or indeed simply purchasing some bitcoin to spend.
Shedding the darkness
Back when Bitcoin first entered the scene, the first few years were filled with stories of a dark and seedy underworld where drug dealers and hitmen operated with immunity because they traded their products and skills for Bitcoin. While this may have been true, it also holds true for the good ol’ Canadian or US dollar today, and any other currency of value out there.
Thankfully, this fear and doubt has lifted, and the world is now seeing Bitcoin for what it is — the most secure and trusted digital money and store of value.
Buying bitcoin in Canada
One of the easiest ways to get started buying bitcoin in Canada is to use Shakepay, a Montreal company.
Shakepay is a mobile and web app that allows you to buy and sell bitcoin easily and quickly. Signing up is fast and simple, and you can fund your account via Interac e-transfer in minutes.
Shakepay also offers a great ‘recurring buy’ feature, which allows you to dollar-cost average and spread your purchases out. For example, you could fund your account and set your recurring purchase for $5 every day, and the app will purchase $5 worth of bitcoin automatically every 24 hours.
All you need to do is make sure your account stays funded, and you can withdraw the bitcoin to your own wallet at any time.
Bitcoin is money
Bitcoin is changing how we think about money in the new digital world. There is no doubt that it overtake gold as the dominant store of value. Whether this happens in 5 years or 50 years is anyone’s guess. But if the internet is anything to go by, mass adoption of bitcoin will be a similarly rapid event. You cannot stop people from gravitating towards a technology that vastly improves their lifestyle, wealth and security.
In a world where government fiat money is getting inflated away every month, people are starting to look for better ways to store their hard-earned money. And bitcoin is the best digital asset there is.
Bitcoin as legal tender
It is worth noting, however, that digital currencies are not recognized as legal tender in Canada. So while you may be able to buy a pizza or a coffee, or send your friend in Ireland some money in an instant, you won’t be able to pay your taxes or your mortgage with Bitcoin directly.
However, another Canadian company based in Montreal has solved that problem. Bull Bitcoin is a service that allows you to spend bitcoin to pay your regular Canadian bills, such as your hydro, credit card, cell phone and internet, through their Bylls service.
Bull Bitcoin also allows you to easily purchase bitcoin directly to your own wallet, with a variety of funding options.
Taxation of bitcoin in Canada
Like any investment, the gains or losses you make should be recorded in your annual tax return. The Government of Canada website does not make it clear how exactly you should account for digital currency on your tax return, only stating that you should:
How tax rules apply to digital currency
Tax rules apply to digital currency transactions, including those made with cryptocurrencies. Using digital currency does not exempt consumers from Canadian tax obligations.
This means digital currencies are subject to the Income Tax Act.
However, it is safe to assume that as soon as you convert any digital currency back into Canadian dollars, this is classed as income from capital gains and needs to be declared as such.