Is Bitcoin Legal In Canada?

Is Bitcoin Legal In Canada?

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

Holding Bitcoin in a digital currency wallet and being a crypto trader in Canada is also completely legal, whether you acquire your Bitcoins from a Canadian crypto platform like Kraken, Bitbuy or 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 as a form of payment if they wish. 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, remember that you'll need one or more powerful computers to mine Bitcoin or any other cryptocurrency, which can cost a pretty penny.

Alternatively, you can mine other cryptos like Helium, which uses a relatively cheap mining rig that costs less than $500.

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 conduct other government-related transactions.

Additionally, cryptocurrencies don't enjoy the same legal safeguards as traditional currencies. This means 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 that accept US dollars as payment, although US dollars aren't considered a legal Canadian tender either.

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?

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, cashing out, or mining cryptocurrencies.

The Canadian government has a guide to assist taxpayers in declaring their cryptocurrencies on their tax returns. The 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. Some platforms (like Shakepay, Newton and Wealthsimple Crypto) are more expensive than others (like CoinSmart, VirgoCX and Bitbuy), and some offer more features than others. After reviewing dozens of options for Canadians, we recommend Kraken. Here are a few of the reasons why we recommend Kraken over other exchanges:

Best In Canada

Total Fees: ~0.16% Security: Best in class Customer Support: Excellent By far the lowest fees in Canada.

★★★★★ Rated 4.9/5

Based in the U.S. and regulated by FINTRAC in Canada, Kraken is undoubtedly the best crypto exchange in Canada. Founded in San Francisco back in 2011, Kraken outperforms the smaller Canadian crypto exchanges due to its significantly lower fees, better customer support, and superior overall trading experience.

For starters, Kraken's fees are far lower than any Canadian exchange, with most users paying 0.16% per transaction (fees decrease down to 0% if you trade high volumes). Kraken's spreads are also absurdly low, typically around $0.10 per Bitcoin, which is 0.0003%. Compare that with the other Canadian exchanges—which routinely charge up to 2% in commissions plus an additional 2% or more in spreads—and it's easy to see why Kraken is such a popular exchange.

Kraken also has better customer support than any other Canadian exchange, and is the only exchange in Canada offering telephone support (available in English, French and Spanish). It supports 100+ cryptocurrencies and has a world-class trading platform and mobile app that's powerful yet easy to use.

If that wasn't enough, Kraken's trading platform is far more professional and robust than its Canadian peers, offering features like NFT trading, staking and support for a wide range of fiat currencies including CAD, USD, EUR, and more.

Overall, Kraken is the best fit for most Canadian crypto investors because it has lower fees, better support and a better trading platform overall. If you're looking to start trading crypto in Canada, we strongly recommend Kraken.

Features

• Extremely low trading commissions (0.16%)
• Extremely low spreads (0.0003%)
• Trade 100+ cryptocurrencies
• Stake 100+ cryptocurrencies
• Simple, intuitive user interface
• Kraken Crypto Watch allows you to keep track of the crypto market
• NFT trading inside the Kraken app
• 24/7 customer support via phone, email and live chat
• Plenty of free educational resources available to users
• 95% cold storage policy
• Regulated by FINTRAC

Cost

• Trading Fees: 0.16% (spot trades cost 0.26%)
• Spreads: 0.0003%
• Fiat Deposit Fee: 0%
• Fiat Withdrawal Fee: $10 CAD

Best For

Canadian cryptocurrency investors looking to trade with the industry's lowest fees.

In Summary

Bitcoin is legal in Canada, as are all cryptocurrencies. Therefore, trading Bitcoin for a profit is a great way to make extra income in Canada. 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 Kraken. Kraken 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.