How to buy cryptocurrency in Canada?

Purchasing cryptocurrencies like Bitcoin (BTC), Dogecoin (DOGE) or Ether (ETH) in Canada is on an upsurge as crypto ownership rises. Moreover, the Ontario Securities Commission, in their report, stated that more than 30% of Canadians plan to buy crypto assets in 2023. 

So, if you are wondering how to buy Bitcoin or crypto in Canada, then read on and familiarize yourself with the details.

Is it legal to buy cryptocurrency in Canada?

Cryptocurrency trading is legal in Canada even though it is not yet considered a legal tender. Canada Revenue Agency (CRA) specifies what virtual currencies are and provides information on all applicable taxes. One can choose to shop in cryptocurrency in Canada if retailers, coffee shops or e-commerce websites accept it.  

The CRA treats cryptocurrency like a commodity that can result in capital gains or losses. Taxable transactions include sending, receiving and trading cryptocurrencies. Canada Securities Administrators’ website details how your crypto assets are regulated in Canada.

Do Canadian banks allow cryptocurrency?

With the growing popularity of cryptocurrencies, Canadian banks do allow and recognize cryptocurrency trading subject to federal and state regulations. For instance, Canadian banks have installed 2600+ Bitcoin ATMs, with Toronto at the highest with 897 ATMs. These ATMs allow people to convert their physical money into digital currency and buy and sell cryptocurrency in exchange for cash. Canada ranks second worldwide in Bitcoin ATMs after the United States.

Some popular Canadian banks which support crypto trade in one way or the other include the National Bank of Canada, Canadian Imperial Bank Of Commerce, Royal Bank of Canada, Scotiabank, ATB and Coast Capital, among many others also joining in as the crypto popularity in Canada continues to rise. 

Banks allow purchasing crypto using a debit card, Interac e-transfer or bank wire transfer. Customers are required to link their bank accounts with a cryptocurrency exchange for buying cryptocurrencies using the Canadian dollar or other popular fiat currencies. 

Credit cards can also be used to purchase crypto. However, this option can be expensive since banks may charge higher interest rates and additional cash advance fees on crypto credit card purchases. 

Ways to buy cryptocurrency in Canada

Two common ways to buy cryptocurrency in Canada include either through a broker or directly through an exchange. However, cryptocurrency exchanges give the account holder more control over their crypto while brokers like Wealthsimple and Mogo may put restrictions on holdings, withdrawals, transfers and storage depending on their brokerage policy. 

Crypto brokers in Canada are very similar to a traditional finance trading platform. They aim to simplify the process and reduce complexities through their platforms and their expertise in the cryptocurrency field. However, this convenience comes at a cost, as they do charge higher fees for their services in comparison to the crypto exchanges. 

Steps to buy cryptocurrency in Canada through a crypto broker

The below steps explain how to buy cryptocurrencies via brokers if one doesn’t want to trade using a crypto exchange.

Step 1: Set up an account on a crypto trading platform

Select a crypto trading platform of your choice, go to its website or download the application and sign up. Create an account with a valid email and phone number and fill in the requisite personal information details to verify your account.  

Step 2: Add funds to your account

Most crypto broker platforms have many options for payment methods to load trading funds with a debit card, credit card, PayPal, wire transfer or gift cards. Transfer fees can vary for each method and are usually higher for credit card payments as they are quicker (5-10 minutes usually) and low for wire transfers which can take a few days to load funds. 

Step 3: Buy cryptocurrency of your choice

Select the crypto you want to purchase, place an order and the trading platform will find a match for your buy order. However, crypto brokers have a limited basket of currencies to select from and they do not trade in every cryptocurrency unlike crypto exchanges, which offer more choices. There are also restrictions on sell orders and volume, so it is a good practice to check these before investing any funds.

Steps to buy cryptocurrency in Canada using a crypto exchange

The steps below will get the ropes for crypto exchange though each exchange may show slight variations.

Step 1: Pick your exchange

A crypto exchange is a digital marketplace where buyers and sellers can meet and trade different types of cryptocurrencies. Many exchanges will allow trading the Canadian dollar for crypto or exchanging one type of crypto for another. The exchanges that support cryptocurrency trading in Canada are Coinbase, Binance, Crypto.com, Kraken, KuKoin, Bitbuy and Coinberry.

Step 2: Create an account

After selecting an exchange, sign up with a valid email and phone number…