Find out how to purchase Bitcoin and other cryptocurrencies in Canada using brokers or straight from a cryptocurrency exchange.

As cryptocurrency ownership increases, there is an increase in Canadians buying cryptocurrencies like Bitcoin, Dogecoin, and Ether. 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.

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 fees on purchases made with cryptocurrency credit cards.

Ways to buy cryptocurrency in Canada

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.

Steps to buy cryptocurrency in Canada through a crypto broker

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 using a crypto exchange in Canada

The steps listed below will teach you the basics of crypto exchange, though 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 support cryptocurrency trading in Canada.

Create an account in step 2

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 after the account has been activated, then add money to the newly created cryptocurrency account. Once you have the money available, you can place a crypto buy order and buy any cryptocurrency that is listed on the exchange. Although Binance Coin and Solana are two popular altcoins, most people purchase Bitcoin in Canada.

On these exchanges, one can also sell cryptocurrency, convert it to fiat, and then withdraw the proceeds into the corresponding bank account. Using a bitcoin ATM is another way to convert cryptocurrency into cash in Canada. The majority of ATMs charge exorbitant service fees, and not all of them have this feature.

How can I keep my cryptocurrency safe in Canada?

Because crypto assets, unlike fiat, are not covered by any insurance protections 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 secure safe storage for your cryptocurrency. In Canada, there are several options for storing cryptocurrency.

On the exchange

Stake and farm the cryptocurrency while leaving it on the exchange to generate passive income. Staking generates cryptocurrency interest by locking cryptocurrency holdings on the exchange, whereas farming generates interest by using already-existing crypto assets on the exchange.

Activate two-factor authentication (2FA) in the account login’s security settings to add an additional layer of security. Spreading the cryptocurrency assets across several exchanges is another way to lower risk. Nevertheless, storing on multiple exchanges may reduce the risk of losing all assets in the event of a hack, seizure, or closure of an exchange, as centralized exchanges have been known to alter policies, rules, or cease operations.

Bitcoin wallets

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.

How can I purchase cryptocurrencies in Canada?
How can I purchase cryptocurrencies in Canada? 4

MetaMask, Binance Trust Wallet, Coinbase Wallet and CoinSmart are examples of crypto hot wallets in Canada, while cold wallets in use are Ledger and Trezor. One can also strike a balance by storing in a combination of hot and cold wallets as storing large quantities of coins in a single wallet can be quite risky.

How and where to spend cryptocurrency in Canada?

Purchases can be made with BTC and other crypto in Canada at retailers who directly accept crypto payments or through debit or prepaid cards. A 2022 Capterra survey of 1,000 Canadian respondents revealed that 62% of the participants are interested in being paid in crypto in the next five years.

CoinGate accepts a wide range of cryptocurrencies where one can buy gift cards for eBay, Amazon, PlayStation, BestBuy, Airbnb and more. Other retailers that accept crypto payments in Canada include Newegg (gaming products), Travala (travel bookings) and Overstock (home furnishings). 

Coincards is another webshop to purchase gift cards for many top brands including BestBuy, Amazon, Air Canada and more. They accept BTC and other cryptocurrencies and offer prepaid cards for shopping on their website.The prepaid card is reloadable and can be topped up with crypto as per customer requirement.

Proactive provisions and clearly defined regulations set Canada apart and provide a benchmark for other nations to foster a crypto-friendly environment with the aim of accelerating cryptocurrency adoption proactively. However, investors should do their own extensive research and be well-versed with the crypto landscape before committing any funds.

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