How can I purchase cryptocurrencies in Canada?
Find out how to purchase Bitcoin and other cryptocurrencies in Canada through brokers or straight from a cryptocurrency exchange.
As cryptocurrency ownership increases, so does the demand for cryptocurrencies like Bitcoin (BTC), Dogecoin (DOGE), and Ether (ETH) in Canada. In addition, the Ontario Securities Commission reported that in 2023, more than 30% of Canadians intend to purchase cryptocurrencies.
So, if you’re curious about how to purchase Bitcoin or other cryptocurrencies in Canada, keep reading to learn more.
Is purchasing cryptocurrencies permitted in Canada?
Even though cryptocurrencies are not yet regarded as legal tender, trading them is permitted in Canada. The Canada Revenue Agency (CRA) defines virtual currencies and offers details on all taxes that may be relevant. If merchants, coffee shops, or e-commerce websites accept bitcoin, one can choose to make purchases in it in Canada.
Cryptocurrency is viewed by the CRA as a commodity that has the potential to generate capital profits or losses. Cryptocurrency sending, receiving, and trading are all taxable transactions. On the website of the Canada Securities Administrators, you may learn more about how Canadian law governs crypto assets.
Do banks in Canada accept cryptocurrencies?
Due to state and federal laws and the rising popularity of cryptocurrencies, Canadian institutions do permit and recognize cryptocurrency transactions. For instance, over 2600 Bitcoin ATMs have been placed by Canadian institutions, with 897 of those in Toronto. These ATMs enable users to swap their hard currency for digital currency as well as purchase and sell bitcoin for cash. After the US, Canada is the second country in the world with the most Bitcoin ATMs.
The National Bank of Canada, Canadian Imperial Bank of Commerce, Royal Bank of Canada, Scotiabank, ATB, and Coast Capital are some well-known Canadian banks that support crypto trade in one form or another. Many other banks are coming in as the popularity of cryptocurrencies in Canada keeps growing.
ATMs for bitcoin in Toronto
Debit cards, Interac e-transfers, and bank wire transfers are all accepted by banks for buying cryptocurrencies. Customers who wish to purchase cryptocurrencies using the Canadian dollar or other well-known fiat currencies must link their bank accounts with the cryptocurrency exchange.
Cryptocurrency purchases can also be made with credit cards. This option, however, may be pricey because banks may impose higher interest rates and additional cash advance costs on purchases made with cryptocurrency credit cards.
Canadian cryptocurrency purchasing options
In Canada, buying cryptocurrencies is often done either directly through an exchange or through a broker. While brokers like Wealthsimple and Mogo may impose limitations on holdings, withdrawals, transfers, and storage based on their brokerage policy, cryptocurrency exchanges provide account holders more flexibility over their coin.
Canadian cryptocurrency brokers are highly reminiscent of a regular financial trading platform. Through their platforms and their knowledge of the cryptocurrency industry, they hope to streamline the procedure and lessen its complexity. They do charge larger fees for their services compared to the crypto exchanges, so this ease does come at a price.
How to use a bitcoin broker in Canada to purchase cryptocurrencies
If you don’t want to trade using a cryptocurrency exchange, follow the instructions below to purchase cryptocurrencies using brokers.
Step 1: Open a trading account on a cryptocurrency exchange
Choose a cryptocurrency trading platform of your preference, visit its website or download the app, and register. Create an account with a working email and phone number, and then fill out the necessary fields for your personal information.
Step 2: Increase your account’s balance.
The majority of cryptocurrency broker platforms offer a wide range of payment options, including wire transfers, debit cards, credit cards, PayPal, and gift cards. Transfer costs can differ for each method, but they are often higher for credit card payments since they are processed more quickly (5–10 minutes on average) and lower for wire transfers because they can take several days to load cash.
Step 3: Purchase your preferred coin.
The trading platform will locate a match for your buy order when you choose the cryptocurrency you wish to purchase and make an order. Contrary to cryptocurrency exchanges, which provide a wider range of options, crypto brokers offer a smaller selection of currencies and do not engage in trading in all cryptocurrencies. Before making any investments, it is a good idea to verify the limitations on sell orders and volume.
How to purchase cryptocurrencies via a crypto exchange in Canada
The methods listed here will teach you the basics of crypto exchange, while each exchange may have a few minor differences.
Choose your exchange in Step 1
A cryptocurrency exchange is an online market place where traders of various cryptocurrencies can connect. The Canadian dollar can be traded for cryptocurrencies on several platforms, as well as one cryptocurrency for another. The exchanges Coinbase, Binance, Crypto.com, Kraken, KuKoin, Bitbuy, and Coinberry enable cryptocurrency trading in Canada.
Create an account in step two.
After deciding on an exchange, create an account by signing up with a working email and phone number. It will be necessary to upload verification documents, such as a driver’s license and passport. The majority of exchanges will request a selfie to verify that the person’s face matches the identification documents they have received.
Step 3: Put money down and purchase cryptocurrencies
Link a bank account when the account has been activated, then add money to the newly created cryptocurrency account. Once you have the money available, you may place a crypto buy order and buy any cryptocurrency that is listed on the exchange. In Canada, the market is filled with altcoins like Binance Coin (BNB) and Solana, but most consumers purchase bitcoin (BTC) (SOL).
Likewise, one can sell cryptocurrency on these exchanges, convert it to fiat, and then withdraw the proceeds into the associated bank account. Another approach to turn cryptocurrency into cash in Canada is to use a bitcoin ATM. However, not all ATMs offer this feature, and a lot of them have exorbitant service charges.
How can I keep my cryptocurrency safe in Canada?
Because crypto assets, unlike fiat, are not covered by any insurance safeguards like the Canada Deposit Insurance Corp., it is crucial to store and secure them. Because there is a high risk of theft, hacking, fraud, or cyberattacks, it is crucial to arrange safe storage for your cryptocurrency. In Canada, there are several options for keeping cryptocurrency.
On the discussion
Keep the cryptocurrency on the exchange and profit from farming and staking passively. Staking increases cryptocurrency interest by locking cryptocurrency holdings on the exchange, whereas farming increases cryptocurrency interest by utilizing cryptoassets already present on the exchange.
To add an additional layer of security, enable two-factor authentication (2FA) in the account login security settings. By distributing the crypto assets across several exchanges, risk can also be minimized. The danger of losing all assets in the event of a hack, seizure, or closure of one exchange may be dispersed by storing on various exchanges, though centralized exchanges have been known to modify policies, rules, or cease operations.
Private keys, or a password allowing access to bitcoin assets, are stored in cryptocurrency wallets. As a result, although they retain the keys that allow access to your digital currency that is stored on the blockchain, crypto wallets do not really store your cryptocurrency. One wallet can store numerous coins, including BTC, ETH, DOGE, and any other altcoins that wallet supports.
Securing the seed or recovery phrase is important, though, as it aids in recovering private keys in the case that someone forgets. The stored cryptocurrency assets will be permanently lost if the seed phrase is lost or forgotten.
Hot and cold wallets are the two types of bitcoin wallets available in Canada and other countries.
Cold versus hot wallets
In Canada, examples of crypto hot wallets include MetaMask, Binance Trust Wallet, Coinbase Wallet, and CoinSmart. Ledger and Trezor are examples of cold wallets in use. As keeping a lot of coins in one wallet can be problematic, one can also strike a balance by storing them in a mix of hot and cold wallets.
Where and how may one use cryptocurrencies in Canada?
BTC and other cryptocurrencies can be used to make purchases in Canada at merchants who accept them directly or with debit or prepaid cards. According to a 2022 Capterra study of 1,000 Canadians, 62% of respondents are interested in getting paid in cryptocurrencies during the next five years.
Gift cards for eBay, Amazon, PlayStation, BestBuy, Airbnb, and other retailers can be purchased on CoinGate using a variety of cryptocurrencies. Other Canadian merchants that accept cryptocurrency payments include Overstock, Travala, and Newegg (for gaming merchandise) (home furnishings).
Another online store where you can buy gift cards for many well-known companies, such as BestBuy, Amazon, Air Canada, and others, is Coincards. They provide prepaid cards for use when buying on their website and accept Bitcoin and other cryptocurrencies. The prepaid card can be reloaded and topped off with cryptocurrency as needed by the consumer.
Canada stands out because of its aggressive policies and well-defined rules, which serve as a model for other countries looking to promote a crypto-friendly atmosphere with the objective of hastening cryptocurrency adoption. Before investing any money, however, investors should conduct thorough study of their own and become familiar with the cryptocurrency market.