Are you interested in finding out how you get cryptocurrency? Would you like to become an expert in the subject? Let's get started! Start investing in cryptocurrency by following these easy guide! You will find everything you need to know to get crypto in Canada!
Is it legal to buy cryptocurrency in Canada?
Would you like to know if crypto is legal in Canada? The answer is yes! It is legal to buy cryptocurrency in Canada and it can be used to buy, sell, and pay for products and services within the Canadian territory. However, the Canadian government has set rules and regulations to protect investors and their money due to the risks involved.
For example, in collaboration with the Investment Industry Regulatory Organization of Canada (IIROC), the Canadian Securities Administrators (CSA) issued guidance about the legislation and regulatory requirements for the crypto sector.
Also, the CSA supports fintech businesses that offer innovative products, services, and applications in Canadian territory to understand how technology innovations impact capital markets and what may be required to modernize their regulatory framework.
Learn more about if cryptocurrencies are safe investments in Canada!
How can a beginner invest in cryptocurrency in Canada?
To invest in cryptocurrency, you don't necessarily need to be an expert investor. However, knowing where to start will always be a good idea if you are eager to begin your investment path in crypto! An essential part of learning to start investing in crypto in Canada is discovering where you can do it by finding which crypto broker is the right fit. But what does a crypto broker means precisely?
A cryptocurrency broker is an online platform that offers online financial services to purchase or sell crypto and acts as an intermediary between the cryptocurrency markets. Some platforms or crypto brokers are popular in Canada, for example, for their low-fee commissions and user-friendly interface. However, an essential thing to think about is that to ensure you choose the right platform for your needs, consider the ones licensed under FINTRAC in Canada. The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC), Canada's financial intelligence unit, is in charge of protecting personal data in the crypto sector.
Some recommended cryptocurrency platforms in Canada you can check out are:
- Binance
- Coinbase
- Kraken
- Crypto.com
- BitBuy
So, now that you got familiarized yourself with the most popular crypto brokers in Canada learn what you can do to start investing.
- Step 1: Register an account with a recognized broker. Go to the official home page of your preferred broker and click on the "Get Started" option. The platform will ask you to fill in your details, and you will need to provide an official ID to validate your account and start buying cryptocurrency in Canadian dollars.
- Step 2: You will need to deposit some funds. To be able to use any broker or exchange platform, you will need to deposit a minimum fee that will variate according to the platform (for example, with BitBuy, you will need to deposit $50). Then you can deposit Canadian Dollars with a debit or credit card by entering your card details.
- Step 3: You can search for your preferred cryptocurrency. Also, depending on the platform type, you can find the most popular crypto available. For example, Binance and Coinbase are the largest cryptocurrency exchanges in the world.
- Step 4: Buy your favorite crypto! And last but not least, create a buy order by entering the amount of money you would like to invest. Once you confirm your order, you will view your digital tokens on your account!
Discover the types of cryptocurrencies available in Canada!
What banks allow you to buy cryptocurrency in Canada?
If you want to discover which banks or financial institutions in Canada are considered crypto-friendly, you should know that the options mentioned below accept cryptocurrencies as a means of monetary trade. For example, these banks will allow you to access more attractive transaction fees between cryptocurrencies and traditional currency. In addition, these entities also will enable the integration of crypto into standard banking operations in a simultaneous manner.
Some excellent crypto-friendly banking options in Canada include:
- Toronto-Dominion Bank (TD): The bank is also known as TD Canada Trust in Canada. If you are interested in buying crypto with Canadian Dollars from a TD account, you first need to open an account in a trading platform for crypto. And then, you will be able to use e-Transfers, debit and credit cards, and electronic payment services.
- National Bank of Canada: The National Bank of Canada is Canada's sixth-largest commercial bank. Here you can purchase crypto using any financial products and services used for fiat currency (for example, the Canadian dollar, U.S. dollar, the British pound, and the euro). You can buy cryptocurrency using a debit or credit card, electronic payment services, or eTransfer.
- Royal Bank of Canada: It's possible to buy cryptocurrency with Canadian dollars if you have an RBC account. However, you will need to use a regulated platform (or broker) to transfer your CAD funds from your bank account to the broker. The Royal Bank of Canada does not support the purchase or sale of crypto if no broker is used.
- Canadian Imperial Bank of Commerce (CIBC): CIBC Bank is another good option if you are looking for a crypto-friendly bank. However, you will also need to sign up with a trusted broker for crypto to transfer your Canadian Dollars funds from your CIBC account. Through these regulated platforms, you can also do deposits and trading.
- Bank of Nova Scotia (Scotiabank): Scotiabank is another crypto-friendly bank; however, it does not offer any specific services or products dedicated to crypto. As in other Canadian banks, Scotiabank allows its customers to buy, sell and transfer crypto through regulated brokers.
- Bank of Montreal: The Bank of Montreal (BMO) is another financial entity that facilitates crypto operations through regulated brokers since it does not directly facilitate the buying or selling of crypto through its online banking services.
Now that you know some excellent options for crypto-friendly Canadian banks, you may wonder if it is possible to withdraw crypto from them. However, the most common way to cash out your crypto is by transferring your funds to a bank account through a broker or exchange platform like Coinbase or Binance.
You must know that you can also find Bitcoin ATMs or a peer-to-peer marketplace in Canada, where the machine will give you cash in exchange for your bitcoin or vice-versa. To withdraw from Binance, you must log in, choose "Withdraw," then choose the network and currency and click "Receive."
Is crypto tax-free in Canada?
If you thought that cryptocurrency gains were not subject to tax, we have to tell you that what you were thinking is far from reality.
If you make investments and earn profits in crypto, you will be subject to capital gains tax or business income tax on the sale or mining of cryptocurrency. The percentage of net taxable profits will depend on whether the profits are capital gains or business income. Usually, 100% of cryptocurrency profits are taxable in business income. And, for capital gains, this drops to 50% taxable.
Also, according to the Canada Revenue Agency (also known as CRA), in charge of administering the tax laws for most provinces and territories for the Government of Canada, crypto is always subject to Income Tax. You must pay Income Tax on any crypto gains and any additional income from crypto, such as staking or if you are being paid in crypto.
Whenever you sell, trade, spend, or gift crypto, if you have a gain, you will have a tax liability. However, if you live in Canada, you do not have to pay tax on either buying or holding cryptocurrencies. As long as you are not earning any income from cryptocurrency, you generally only have to pay taxes on crypto once you sell. And the only way to avoid taxes will be by not selling any.
Pros and Cons of Cryptocurrency in Canada? Learn more!
Become a crypto expert with Superprof!
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