Is Buying Tether (USDT) Legal in Canada?

Yes, buying Tether (USDT) in Canada is legal through platforms registered with the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) as Money Services Businesses (MSBs). This registration ensures adherence to anti-money laundering (AML) and know-your-customer (KYC) protocols.

For Canadians interested in purchasing USDT, it's advisable to use Canadian crypto exchanges registered with FINTRAC and comply with both federal and provincial regulations. However, regulatory views on stablecoins vary. The Ontario Securities Commission (OSC) previously restricted some exchanges from offering USDT trading due to reserve backing concerns.

How to Buy USDT in Canada

Canadian investors can easily buy Tether using Kraken, an exchange registered as a Money Services Business with FINTRAC (MSB Registration #M19343731). Kraken offers strong liquidity for CAD-USDT trading pairs, providing users with competitive pricing.

Deposits in Canadian dollars (CAD) can be made through Interac e-Transfer, domestic wire transfers (Credit Union Atlantic), SWIFT, or via an in-person cash deposit at Canada Post.

Follow these simple steps to buy USDT on Kraken in Canada:

1. Sign Up: Visit Kraken’s official website, register for an account, and choose an individual or business profile.
2. Verify Your Identity: Complete the mandatory KYC verification by uploading clear copies of your Canadian passport, driver’s license, or other accepted government-issued ID, along with requested personal details.
3. Deposit Canadian Dollars: Log into your account, select “Deposit,” choose Canadian dollars (CAD), and transfer funds using your preferred payment method.
4. Buy USDT: Head over to the CAD-USDT trading pair, input the amount of Tether you want to buy, review all details carefully, and confirm the purchase.

Best Exchanges to Buy USDT in Canada

Canadian cryptocurrency investors looking to purchase Tether (USDT) with Canadian dollars (CAD) have multiple reliable options. Kraken, CoinSmart, Bitbuy, and Coinbase are among the most trusted platforms for their advanced security standards and diverse CAD deposit options.

Here's a comparison of leading Canadian exchanges to help you find the ideal platform:

CAD to USDT Fees

For Canadians interested in exchanging Canadian dollars (CAD) for Tether (USDT), it's important to be aware of the fees charged by cryptocurrency platforms. Here’s a clear breakdown of typical costs:

• Deposit Fees: Depositing CAD via Interac e-Transfer or wire transfers from banks like RBC  is often free or incurs very low charges. Credit and debit card deposits usually carry higher fees, typically ranging from 2% to 4%, depending on the card issuer.
• Withdrawal Fees: Transferring CAD from your crypto account back to a Canadian bank account frequently involves minimal charges, typically under $5 or sometimes free.
• Trading Fees: Popular exchanges such as Bitbuy charge a variable spread between 0.5% and 3.85%. Other exchanges like Kraken apply a maker-taker fee structure, offering lower fees of 0.16% for makers and 0.26% of takers.

To minimize overall costs, consider funding your exchange account using bank transfers or Interac e-Transfers, and select platforms known for competitive fee structures.

Tax Considerations for Tether in Canada

In Canada, holding Tether (USDT) or any cryptocurrency is not a taxable event. According to the Canada Revenue Agency (CRA), gains from crypto transactions can be classified either as capital gains or as business income, depending on your trading frequency and intent.

When you sell or trade USDT for more than its adjusted cost base (ACB), you realize a capital gain. In Canada, 50% of this gain is taxable and must be reported as income on your tax return. Capital gains and losses from crypto transactions should be reported on Schedule 3 of your T1 General tax return.

The CRA actively monitors crypto-related activities, emphasizing the importance of detailed record-keeping. Canadians must track transaction details including purchase and sale dates, exchange rates, amounts involved, and resulting profits or losses in CAD to accurately fulfill tax reporting requirements.

About Tether (USDT)

Tether (USDT) is a widely used stablecoin designed to maintain a 1:1 value with the U.S. dollar. Issued by Tether Limited since 2014, USDT operates across multiple blockchains, including Ethereum, Tron, and Solana, facilitating seamless transactions in the crypto ecosystem. 

In Canada, Tether is classified as a crypto asset, meaning buying and holding USDT is fully legal, though capital gains taxes apply whenever users trade or sell it at a profit. Due to its extensive liquidity, Tether is a preferred choice among Canadian investors who regularly trade crypto.

Final Thoughts

Buying Tether (USDT) in Canada is secure when using FINTRAC-registered exchanges that support CAD deposits and comply with national regulations. Platforms like Kraken and Bitget offer secure transactions, competitive fees, and robust liquidity for CAD-USDT pairs. 

Additionally, it's important to stay informed about provincial regulations, as some jurisdictions have imposed restrictions on USDT trading.