Cryptocurrencies in Canada: Regulations and Possibilities

We use cryptocurrencies for many different purposes in Canada. Some of us invest with them, and some of us use them to play at real online casino Canada sites. However, what is the legal basis for all these? How are cryptocurrencies regulated in this country, and what possibilities do they offer? Below, we answer these questions.

How Is the Crypto Market Regulated in Canada?

Crypto regulation has a long history in Canada. It was the first country to pass a law for cryptocurrencies in 2014. However, this law only prohibited the use of cryptocurrencies for money laundering and terrorism financing. It did not (and still does not) accept them as legal tenders. Under local laws, a currency that is not minted by the Bank of Canada cannot be considered legal tender, and for the same reason, cryptos fall under the responsibility of the Canada Revenue Agency (CRA).

Until recently, the CRA was trying to regulate exchanges, not cryptocurrencies themselves. In other words, it focused on the auditing of crypto exchanges and was not concerned with any other regulation. However, after the collapse of the FTX exchange, CRA began to divide cryptocurrencies into, “stable” and “non-stable.”

By 2023, the CRA began designating stable coins (*) as “securities and/or derivatives” and prohibited Canadian-based exchanges from selling or trading them. These exchanges will no longer be able to offer or accept stablecoins from Canadians. For regular cryptos such as Bitcoin and Ethereum, there are no new regulations. The CRA continues to focus only on the exchanges that host them and brings many regulations to comply with. For example, they must register with the Canadian Securities Administrators (CSA), which means they must also comply with all CSA rules. 

However, this does not mean that exchanges not based in Canada are prohibited or cannot be used. Canadians can still continue to trade using global exchanges like Binance. There is nothing forbidding this. Current legal regulations only affect exchanges established within Canada and do not contain any regulations for users. 

(*) Stablecoins are the general name of cryptocurrencies whose value is equated to another asset (eg USD or CAD). For example, 1 USDT is always equal to 1 USD.

What Crypto Platforms Canadians Can Use? 

There are no regulations that force Canadians to use a particular crypto platform. You can use any Canadian or non-Canada-based exchange – the decision is yours. There are currently no laws that make it difficult to send or receive money from global platforms. But that may soon change: It seems CSA is planning to make crypto exchange regulations stricter in the near future. For this reason, and because local platforms are regulated by the CSA, we recommend choosing a Canadian-based exchange. As of 2023, Canadian exchanges we can recommend include:

• Wealthsimple

• Bitbuy

• Coinsmart

• Coinberry

• Swapzone

• NDAX

• Newton

• VirgoCX

• Shakepay

• Catalyx

• Netcoins

How to Create an Account on a Crypto Platform?

If you choose one of the platforms we have listed, registration will be quite easy and fast. While the registration process for each platform is slightly different, in general, you can create a new account by following these steps:

1. Visit the exchange's site of your choice and click the "sign up" button.

2. The membership form will open. Fill out this form by entering your personal information: this will include your name, address, phone number, and Canada citizenship ID.

3. You will be asked to verify all this information in the future, so make sure they are accurate and up to date.

4. After creating an account, open your profile page by logging in with your username and password.

5. In the next step (*), you need to complete the KYC process, that is, to verify your identity by uploading some documents. Usually, a copy of your citizenship certificate and bank statement will suffice, although different documents may be required for this.

6. Finally, connect a payment method (credit card, bank account, e-wallet, etc.) to your exchange account. This is important because a payment method must be added to your account to purchase or withdraw crypto.

That's all! You can now start using the platform by downloading a digital wallet. If available, choose the wallet of the exchange you are a member of.

(*) You can also choose to complete the KYC process before making a withdrawal. Most exchanges allow you to sell or buy crypto just by registering. However, the KYC period must be completed in order to withdraw your funds on the platform, and doing this early on will save you time.

How to Withdraw Cryptos in Canada?

We mentioned above that after you become a member of a crypto exchange, you need to add a payment method to your account. You can simply withdraw the money you earn on the platform to this payment method (for example, to your bank account). This is no different than withdrawing from an electronic wallet like PayPal. Alternatively, you can transfer your funds to the address of your digital wallet and transfer them to different accounts using the wallet.