How to Buy Cryptocurrency in Canada: A Comprehensive Guide

Cryptocurrency ownership is on the rise in Canada, with more than 30% of Canadians planning to buy crypto assets in 2023, according to the Ontario Securities Commission. This comprehensive guide aims to provide a clear pathway for Canadians to buy Bitcoin and other cryptocurrencies, ensuring a smooth and informed experience.

Is It Legal to Buy Cryptocurrency in Canada?

Yes, buying and trading cryptocurrencies is legal in Canada, although cryptocurrencies are not considered legal tender. The Canada Revenue Agency (CRA) treats cryptocurrencies as commodities, subjecting them to capital gains or losses taxation. Transactions such as sending, receiving, and trading cryptocurrencies are taxable events.

Do Canadian Banks Allow Cryptocurrency Transactions?

Most major Canadian banks support cryptocurrency transactions, allowing customers to buy crypto using debit cards, Interac e-transfers, or bank wire transfers. However, using credit cards can incur higher interest rates and additional cash advance fees. Popular banks that facilitate crypto transactions include the National Bank of Canada, Canadian Imperial Bank of Commerce, Royal Bank of Canada, Scotiabank, ATB, and Coast Capital.

Ways to Buy Cryptocurrency in Canada

Through a Crypto Broker

Crypto brokers simplify the buying process but often charge higher fees. Here’s how to buy crypto through a broker:

1. Set Up an Account: Choose a broker, sign up, and verify your account with personal information and a valid email and phone number.
2. Add Funds: Load your account with funds using a debit card, credit card, PayPal, wire transfer, or gift cards. Note that fees vary by method.
3. Buy Cryptocurrency: Select the cryptocurrency you want to purchase, place an order, and let the broker match it. Be aware of any restrictions on holdings, withdrawals, and transfers.

Through a Crypto Exchange

Crypto exchanges offer more control and usually lower fees compared to brokers. Follow these steps to buy crypto via an exchange:

1. Pick Your Exchange: Choose a reputable exchange like Coinbase, Binance, Crypto.com, Kraken, KuCoin, Bitbuy, or Coinberry.
2. Create an Account: Sign up, verify your identity with documents such as a driver’s license or passport, and provide a selfie for identity confirmation.
3. Deposit Funds: Link your bank account and deposit funds into your crypto exchange account.
4. Buy Cryptocurrency: Place a buy order for your desired cryptocurrency. Exchanges offer a wider variety of coins compared to brokers.

How to Store Cryptocurrency in Canada

On the Exchange

Leaving your crypto on the exchange allows for easy trading and the potential to earn passive income through staking and farming. However, this method carries risks such as theft, hacking, and changes in exchange policies. Enable two-factor authentication (2FA) for added security and consider spreading assets across multiple exchanges.

Crypto Wallets

Crypto wallets store private keys that provide access to your crypto assets. They do not store the crypto itself, which remains on the blockchain. There are two main types of wallets:

• Hot Wallets: Online wallets such as MetaMask, Binance Trust Wallet, Coinbase Wallet, and CoinSmart offer convenience but are more vulnerable to hacks.
• Cold Wallets: Offline wallets like Ledger and Trezor provide greater security for long-term storage.

Ensure you secure the seed or recovery phrase, as losing it means losing access to your crypto.

How and Where to Spend Cryptocurrency in Canada

You can spend cryptocurrencies directly at retailers who accept crypto payments or through prepaid cards. CoinGate and Coincards offer gift cards for various top brands that accept crypto payments. Retailers like Newegg, Travala, and Overstock also accept crypto payments for their products and services.

Conclusion

Buying cryptocurrency in Canada is a straightforward process if you understand the steps and precautions involved. Whether you choose a broker for convenience or an exchange for control and lower fees, ensure you store your crypto securely and stay informed about the latest regulations. With the increasing adoption of cryptocurrencies, now is an excellent time to explore the potential of digital assets in your financial strategy.