Cryptocurrency is one of the most potential forms of investments in the world. The current market cap of digital currencies stands at $250 billion, half of which consists of Bitcoin. The price of Bitcoin has reached 21,000 CAD in December 2017.
Everybody wants to join in and gain from cryptocurrencies but you also need to be cautious. In 2017, Canadians have been duped of $1.7 million through frauds related to cryptocurrency!
So there are a few things to keep in mind!
Is cryptocurrencies legal in Canada?
You are free to buy and trade cryptocurrencies in Canada. They are listed under digital currencies in the Government of Canada webpage.
But you have to remember that cryptocurrencies are not considered as legal tenders according to Canadian laws.
What can you do with cryptocurrencies?
Here are some of the things you can do with cryptocurrencies.
- You can buy and hold cryptocurrencies
- They can be used to purchase goods and services where they are accepted
- You can also buy and sell cryptocurrencies through cryptocurrency exchanges
- Buy and sell it to make profits, just like many stock traders do.
Are there any tax obligations on cryptocurrency in Canada?
The Canadian laws don’t require you to disclose your cryptocurrency portfolio value anytime but you are required to pay tax on gains arising out of it. All gains in a calendar year must be reported on your annual tax return.
The gain will fall under the Canadian tax rules governing usual capital gains.
For example, you have purchased $300 worth of Ethereum in May and sold it for $600 in December 2018. So you should declare the gain of $300 from the sale of cryptocurrency in your next tax return.
You should keep an eye on the Government of Canada website for the latest regulations related to cryptocurrency.
How to buy cryptocurrency in Canada?
A simple Google search reveals several Canadian based platforms where you can use your credit card or bank account to purchase cryptocurrencies like Bitcoin, Ethereum, and others. You should make proper research and make sure the platform is trustworthy and reliable.
Some cryptocurrency exchanges like Canada’s Quadriga enable citizens to purchase crypto through bank wire or electronic funds transfer. You also need to have your identity verified for creating an account which can take 1 to 2 weeks.
If you are looking to buy Bitcoins, you can also use Bitcoin ATMs spread across various Canadian cities, and especially the bitcoin ATM Toronto. You can deposit cash and get Bitcoins in exchange but the charges are higher than traditional exchanges.
After you have purchased your cryptocurrency, it’s better to transfer it to a digital wallet by downloading the app. The wallet facilitates digital transaction while the cryptocurrency is stored on the blockchain.
Cryptocurrency in Canada
The cryptocurrency industry has gained a lot of interest and many startups have come forward with their own currency or blockchain based products or services. With Canada one of the very first countries and markets to recognize it, things couldn’t get better for a cryptocurrency lover there.