All but one of Canada’s top banks recently decided to place restrictions on cryptocurrency purchases. Some banks banned the use of Interac Online, debit card and credit card payment to buy cryptocurrency. Others only put blocks on credit card purchases, but still allow debit cards and Interac Online. In addition, a number of smaller Canadian banks and credit unions also implemented cryptocurrency restrictions.
If you’re involved in cryptocurrency and you’re having issues with your Canadian bank, keep reading to find out what your options are.
In a Nutshell: the Best and Worst Banks for Crypto
CoinIQ reached out to National Bank of Canada and confirmed that the bank currently does not have any systematic crypto blocks in place. This makes NBC the best large bank for buying crypto in Canada at the moment, since all the other banks have implemented blocks of one form or another. We also found a few credit unions that did not yet have any crypto blocks in place.
The worst bank if you are a regular cryptocurrency trader is Bank of Montreal. BMO blocks not only credit card crypto purchases, but also Interac and debit card buys.
Royal Bank of Canada, TD Bank and Scotiabank block credit card crypto purchases, but allow Interac and debit card buys.
The Top Six Canadian Banks: Where Do They Stand?
In mid-2018, most of Canada’s top international financial conglomerates opted to place blocks and other restrictions on their customers’ ability to purchase cryptocurrencies. Here’s a quick rundown of their cryptocurrency policies.
Royal Bank of Canada
- Status: RBC banned cryptocurrency credit card purchases in May of 2018.
- Source: Royal Bank of Canada blog.
According to a terse, two-sentence statement on the Royal Bank of Canada’s website, the Canadian bank no longer allows its customers to use their credit cards to buy cryptocurrency. No mention was made of debit cards in the statement.
“Effective immediately, RBC will no longer be allowing the use of RBC credit cards for transactions involving cryptocurrency. We regret any inconvenience this may cause.”
- Status: TD Bank banned cryptocurrency credit card purchases in February of 2018.
- Source: The Globe and Mail.
The largest bank in Canada followed in the footsteps of three large American banks (Citigroup, Bank of America and J.P. Morgan Chase) when it decided to stop letting its customers buy crypto with their credit cards in February.
The new policy may or may not be a temporary measure. A representative from TD Bank told The Globe and Mail that the financial conglomerate is reviewing the “evolving market” to determine what its next step forward will be.
“At TD, we regularly evaluate our policies and security measures, in order to serve and protect our customers, as well as the bank.”
Bank of Nova Scotia (Scotiabank)
- Status: Scotiabank likely no longer longer supports credit card crypto purchases.
- Source: A Scotiabank customer recently posted a legitimate looking email from the bank to Reddit.
After TD Bank announced its new ban on using credit cards to buy cryptocurrency in February, a representative from Scotiabank hinted to that it was considering adopting a similar policy when The Globe and Mail reached out to the bank for a comment.
“We understand that regulatory and risk factors related to cryptocurrency continue to evolve and as a result, we are closely reviewing our policies with respect to cryptocurrency transactions.”
Then in April, a Scotiabank customer posted a screenshot of an email from Scotiabank to Reddit:
If the message is as legitimate as it appears to be, that means that Scotiabank customers can’t use their credit cards to purchase cryptocurrencies, either.
Bank of Montreal
- Status: In April of 2018, BMO confirmed that it had started blocking not only credit and debit card cryptocurrency purchases but also Interac Online cryptocurrency payments.
- Source: CoinDesk
CoinDesk recently reached out to BMO to find out if the bank had adopted a cryptocurrency policy that’s similar to Scotiabank’s. A representative confirmed that Scotiabank customers can no longer use Interac Online or their debit or credit cards to purchase cryptocurrencies.
“I can confirm that we no longer allow the purchase of cryptocurrencies via Interac Online Payments or by using a retail consumer Mastercard-branded credit or debit card.”
A few days prior, a Reddit user that claimed to work at Bank of Montreal had posted a screenshot of an internal email. The email message indicated that BMO would begin blocking Interac Online cryptocurrency purchases as well as credit and debit card cryptocurrency purchases. Both the screenshot and the user that posted it have been deleted.
Canadian Imperial Bank of Commerce
- Status: CIBC blocks credit card purchases and allegedly closes the accounts of customers that frequently place cryptocurrency transactions.
- Source: Canadian cryptocurrency exchange QuadrigaCX.
On Reddit, Canadian cryptocurrency exchange QuadrigaCX recently advised one of its customers not to use CIBC.
“You should avoid CIBC and RBC. CIBC tends to hold funds after closing accounts for an unreasonable amount of time, and RBC will close not only your account but those of any of your extended family.”
CoinIQ reached out to CIBC to get more details about its cryptocurrency policy. A representative stated that the bank does not allow their customers to buy cryptocurrency with their credit cards. However, the bank did not confirm whether or not it debit card purchases are also banned.
National Bank of Canada
- Status: Currently unknown, but NBC said that it allowed cryptocurrency transactions in February.
- Source: Bloomberg.
According to a Bloomberg article, the National Bank of Canada still allowed cryptocurrency transactions in February– but that was before BMO, Scotiabank, TD Bank and RBC implemented their new cryptocurrency restrictions.
In March, an NBC customer asked the bank about cryptocurrency and posted the response they allegedly received to Reddit:
“I am still waiting for our advisors to provide me with the appropriate information regarding your request. Sorry for this delay and any inconvenience this might be causing you.”
CoinIQ reached out to NBC for clarification. A representative communicated that though NBC currently doesn’t have any “systematic blocking mechanisms” in place, a block “could be implemented soon.”
Some various Canada-based credit unions may allow cryptocurrency transactions, but others apparently do not.
On Reddit, Canadian cryptocurrency exchange QuadrigaCX recently provided the following advice about Canadian credit unions to one of their customers:
“Some [banks] are [crypto friendly], some aren’t. The main issue however is that all of them use Central One Credit Union as their liquidity and payments provider, and they aren’t particularly crypto friendly. Basically the credit union to the credit unions is hindering crypto friendliness of the credit unions that serve the public.”
Cryptocurrency exchange Morrex has a list of over 100 Canadian credit unions and other types of banks on their website. The websites of the banks CoinIQ visited did not mention whether or not they support cryptocurrency. Anyone interested may be able to get specific information about their cryptocurrency policies by calling up the banks directly or by messaging them on Facebook.
CoinIQ reached out to one of the credit unions on Morrex’s list to find out whether or not it supported cryptocurrency purchases. After communicating that the bank does in fact support debit card cryptocurrency purchases and Interac e-Transfers, the representative then requested that CoinIQ not disclose the name of the bank.
An Alternative Option: Peer-to-peer Cryptocurrency Exchanges
If your bank won’t help you turn your government-issued fiat money into cryptocurrency, you can use one of the new peer-to-peer cryptocurrency exchanges instead.
Essentially, peer-to-peer crypto exchanges are virtual marketplaces that let crypto sellers from all over the planet do business with anyone with an internet connection.
Excellent availability is one of the core benefits of using a peer-to-peer exchange. Peer-to-peer cryptocurrency exchanges are available in Canada and all around the world. They support just about every imaginable payment method, from credit cards to gift cards and even in-person cash payments.
Typical peer-to-peer platforms have interfaces that resemble eBay. The most popular peer-to-peer exchanges are equipped with two features that help prevent fraud:
- Ratings system. Peer-to-peer crypto buyers rate their sellers after each purchase. Because sellers with poor ratings make less money, the ratings systems gives them an incentive to be fair and honest.
- Escrow. Most peer-to-peer exchanges hold the cryptocurrency being exchanged in escrow until both buyer and seller are fully satisfied with the transaction.
Buying cryptocurrency on a peer-to-peer exchange is a fairly straightforward process. All you have to do is find a seller with decent prices that accepts the payment method you want to use.
Turning your cryptocurrency assets back into cash via a peer-to-peer cryptocurrency platform, however, is somewhat trickier. In order to sell cryptocurrency on a peer-to-peer site, you need to build a reputation. That takes a considerable amount of time and effort to accomplish. On the other hand, if you’re having trouble with your bank, using a peer-to-peer exchange to perform the crypto-to-fiat transaction it isn’t a bad option.
LocalBitcoins, Paxful and LocalMonero are three of the most popular peer-to-peer exchanges on the market right now. Here’s a quick look at their core features.
LocalBitcoins ranks among the oldest and most well-known peer-to-peer cryptocurrency exchanges.
Because LocalBitcoins has been around since 2012, it tends to have the most sellers. Competition is a good thing for people looking to purchase bitcoin, since more sellers means lower prices.
The main downside of LocalBitcoins is that the interface hasn’t changed much since its debut six years ago. The simplistic interface lacks some of the features found in competing sites. For example, the search results page is bit hard to navigate because you can’t sort the sellers in such a way that the lowest prices appear at the top of the page. In addition, bitcoin is the only cryptocurrency available on the site. Altcoins are not supported.
On LocalBitcoins, both buyers and sellers can create ads. If you place an ad, you’ll have to pay a 1% fee to LocalBitcoins when you buy or sell. However, if you don’t create an ad, you don’t have to pay any fees to the LocalBitcoins platform.
Individual LocalBitcoins sellers build the cost of doing business into their prices. Cryptocurrency sellers on peer-to-peer exchanges have to worry about the risk of being taken advantage of by chargeback scammers. That’s why sellers that offer risky payment options (credit cards, PayPal, etc.) tend to charge much higher prices compared to sellers that only accept low-risk payment methods (bank transfers, etc.).
For more information about LocalBitcoins, read our full LocalBitcoins review.
Paxful is nearly identical to LocalBitcoins. Like LocalBitcoins, Paxful has a rating system that helps you identify and avoid unreliable sellers. Once you locate a seller that you want to do business with and place an order, the cryptocurrency goes into escrow until both you and the seller are satisfied with the transaction.
The key advantage Paxful has over LocalBitcoins is its interface. Because Paxful’s search results page has customizable filters, you can quickly find the best deals without scrolling through several pages of ads.
On the other hand, Paxful’s newness is also a downside. Not as many sellers use Paxful. Because of that, LocalBitcoins usually has better deals. If you want to find the lowest prices, it’s worth it to check both Paxful and LocalBitcoins before you make a purchase.
Aside from those differences, Paxful and LocalBitcoins are pretty much the same. As is the case with LocalBitcoins, bitcoin is the only cryptocurrency you can buy on Paxful.
Paxful and LocalBitcoins use the same exact fee schedule. Unless you want to create an ad, you don’t have to pay Paxful anything. If you do decide to create an ad, you’ll have to pay a 1% fee.
Like LocalBitcoins sellers, Paxful sellers build the risk of doing business into their prices. The riskier a payment method is for a seller, the more you’ll have to pay in built-in fees.
Find out more about Paxful in our full review.
LocalMonero is another virtual marketplace for cryptocurrency buyers and sellers– but what they’re trading is a different sort of coin: a privacy-focused crypto called Monero.
So-called “privacy coins” like Monero are an answer to one of bitcoin’s major weaknesses: lack of anonymity. If you know someone’s bitcoin address, you can use a bitcoin blockchain explorer to determine how much bitcoin they have. This lack of privacy creates an obvious security issue, because criminals can use the public information contained in the bitcoin blockchain to their advantage.
University College Dublin researchers Fergal Reid and Martin Harrigan of University College Dublin pointed out bitcoin’s privacy weaknesses in a 2011 blog post:
“Bitcoin is not inherently anonymous. It may be possible to conduct transactions is such a way so as to obscure your identity, but, in many cases, users and their transactions can be identified.”
Monero’s developers say that its ring signature and stealth address features allow for greater privacy compared to bitcoin. The official Monero site gives a high level view of how the coin works:
“Monero uses ring signatures, ring confidential transactions, and stealth addresses to obfuscate the origins, amounts, and destinations of all transactions. Monero provides all the benefits of a decentralized cryptocurrency, without any of the typical privacy concessions.”
The LocalMonero peer-to-peer marketplace is essentially LocalBitcoins for Monero. Monero buyers and sellers from all over the world can find each other and negotiate deals. After a deal is made, LocalMonero holds the Monero funds in escrow until both parties are satisfied. A rating system helps LocalMonero users identify untrustworthy buyers and sellers.
LocalMonero uses the same exact fee system as LocalBitcoins and Paxful: a 1% fee for creating an ad. If you don’t opt to create an ad, you won’t have to pay any transaction fees to LocalMonero. LocalMonero sellers build the risk of doing business into their prices.