Unless you’ve been living under a rock for the past five years, there’s a good chance you’ve heard of Bitcoin. This contentious digital asset is one of the most well-known cryptocurrencies in the world.
Regardless of where you stand on the Bitcoin debate (Is it legit? Is it part of a Ponzi scheme?), the real question is – is Bitcoin legal in Canada?
The short answer is yes. Bitcoin is legal in Canada. The Canadian government has announced that buying, selling, and trading Bitcoin – and other cryptocurrencies – is legal. However, bear in mind that you’ll pay capital gains taxes on your Bitcoin, just like you would with any other type of asset.
Is Bitcoin Legal in Canada?
As we stated, yes, Bitcoin is perfectly legal in Canada. You can buy, sell, trade, and hold your Bitcoin within the borders of Canada.
However, it’s important to remember that there are countries where Bitcoin and other cryptocurrencies are outlawed, so don’t try to go through a crypto exchange located in those nations.
Canada treats Bitcoin like it would any other investing asset. It’s not recognized as legal tender, so don’t mistake it for legitimate currency. Regardless, you can legally buy Bitcoin through popular Canadian exchanges like Wealthsimple or Bitbuy.
As a matter of fact, the government site in Canada shows very clearly what you can do with Bitcoin within the borders of the country. For example, once you’ve purchased Bitcoin, you can use it to purchase services or goods, so long as the retailer or merchant accepts it as a form of payment.
You can purchase any digital asset – including Bitcoin – in Canada and for the most part, the Canadian Revenue Agency (CRA) isn’t going to have an issue with it. It’s when you sell your Bitcoin and make a profit that the government wants its cut in the form of capital gains taxes.
How Does Canada Handle Bitcoin?
The Canadian government treats Bitcoin the same way it would any other investment class. For instance, you can be both a long-term holder and a Bitcoin day trader, but you’ll still have to pay taxes on any profits you realize from Bitcoin.
However, when it comes to Bitcoin and other cryptocurrencies, it’s important to remember that you’re dealing with a volatile asset class and market.
You’re likely to see extreme highs and lows in a matter of months, weeks, or even days. It’s not a place for the faint of heart. Because of that, it’s important to remember never to invest more than you can afford to lose.
It’s made very clear by the Canadian government that Bitcoin is not legal tender. There are countries out there – like El Salvador – that accept Bitcoin as currency, but Canada is not one of them.
Because it is not legal tender, Bitcoin isn’t printed and issued by the Royal Canadian Mint or the Bank of Canada. As a result, businesses are not required to accept the digital currency as a form of payment.
Nearly any other type of usage of Bitcoin is acceptable within the country, so long as it’s legal. So, you can bet on sports using Bitcoin, you can exchange it for other cryptocurrencies, or you can use it to buy an anniversary present for your significant other. It’s completely up to you.
The good news is that Bitcoin has been around for over a decade now, so it doesn’t look like it’s going anywhere anytime soon. As a result, it’s likely that we’ll see more and more businesses start to take Bitcoin as a form of payment.
Is Bitcoin Mining Legal in Canada?
There are multiple ways to obtain Bitcoin, with mining being one such way. Bitcoin mining is a method used to create new coins. It requires high-powered computers that miners use to solve complex algorithms and equations.
When a miner solves the equation, they’re completing a block on the blockchain, which is a block of confirmed transactions.
However, Bitcoin mining is very complex, and highly technical, and the hardware required to mine is very expensive. The good news is that there are no laws in Canada that ban mining Bitcoin.
That means you’re free to mine Bitcoin to your heart’s content, so long as you report any profits you make if you sell it.
Are Other Cryptocurrencies Legal in Canada?
Bitcoin is the biggest and most popular cryptocurrency. It stands alone at the top of the industry when ranked by market capitalization. However, there are thousands of crypto projects, coins, and tokens you can buy, sell, or trade.
The good news for Canadian citizens is that the government recognizes all of these as legitimate forms of digital currency.
You can purchase any cryptocurrency supported by the exchange you prefer, including Ethereum, Dogecoin, Polygon, Solana, Cardano, and others. It doesn’t matter if it’s a high-cap or small-cap coin. They’re all legal in Canada.
Keep in mind that the more popular digital assets – like Bitcoin and Ethereum – are the major players in the crypto market. You’re free to invest in any cryptocurrency you want in Canada, but it might make sense to consider larger projects since they’re less likely to flame out.
For example, Bitcoin and Ethereum are so integrated into society and our financial ecosystems that it’s unlikely either of these coins will ever see zero. Of course, no one can see the future, so remember to only invest what you’re willing to lose.
Where Can I Buy Bitcoin in Canada?
If you want to add Bitcoin to your portfolio, there are a few exchanges in Canada you can use to purchase BTC. These include:
Not all exchanges are created equal, so do your research to determine which one makes the most sense for you. For more information about these exchanges, check out our guide to buying Bitcoin in Canada.
FAQs
Here are a few commonly asked questions about the legality of Bitcoin in Canada.
Is it legal to mine Bitcoin in Canada?
Yes, Bitcoin mining is legal in Canada. There are no laws that ban miners from completing blocks on the blockchain. However, you will have to pay taxes on any profits you make from selling your mined BTC.
Can I buy other cryptocurrencies in Canada?
Yes, you can buy any cryptocurrency in Canada. The government recognizes all digital assets as legal forms of currency. You can buy, sell, or trade any coin or token on supported exchanges.
What is the best Bitcoin exchange in Canada?
The best Bitcoin exchange in Canada is the one that meets your unique needs. Consider factors like fees, security, supported payment methods, and ease of use when choosing an exchange.
Do I have to pay taxes on Bitcoin profits in Canada?
Yes, you have to pay taxes on Bitcoin profits in Canada. The government considers Bitcoin and other cryptocurrencies to be property, so you’ll have to pay capital gains taxes on any profits you make from selling BTC.
Conclusion
Bitcoin is legal in Canada. You can mine Bitcoin, buy BTC on exchanges, and trade digital assets without worry. Be sure to report any profits you make from selling Bitcoin on your taxes. Cryptocurrencies are considered property in Canada, so you’ll have to pay capital gains taxes on your earnings.
Other digital assets are also legal in Canada. You can purchase any cryptocurrency that’s supported by your chosen exchange. Do your research to find the best option for you, and remember to invest responsibly.
