Own a Crypto Card - Here's How CRA Taxes them


Crypto cards have surged into the public eye in the last few years as many large exchanges have started giving investors the ability to spend their cryptocurrency with a crypto debit card. A great example of this is’s debit card which is packed with features. 

Crypto cards usually require investors to put cryptocurrency onto the card, which is then converted into Canadian dollars, ready for you to spend online or in real life, which can offer rewards such as cashback on each purchase, usually given to you in crypto.

So, How does CRA tax crypto cards?

The first question we should answer is if CRA see’s purchasing goods or services with cryptocurrency as a taxable event? 

Yes, all events which are converting cryptocurrency into Canadian dollars are taxable at their time of disposal or in this case, purchase.

Simply put, CRA will treat each purchase from a crypto card as its own disposal i.e. trading cryptocurrency for Canadian dollar. It doesn’t matter what purchase you make on your card.

You will pay capital gains tax on 50% of any gain made when ‘trading’ your cryptocurrency for Canadian dollars.

Gain being your crypto assets fair market value less cost basis, 50% will be taxable.

Let's look at an example:

John has $100 worth of Bitcoin in his exchange account and it is connected to his crypto card. His cost basis inclusive of all fees is $100.

Two months later, his Bitcoin has risen in value to $200. On that same day, he decides to purchase a new watch for himself, costing him exactly $200, using his crypto card. 

John is technically now trading $200 worth of Bitcoin for 200 Canadian dollars. How much capital gains tax will he have to pay?

With a cost basis of $100, he has made a nice gain of $100 on his Bitcoin. Because CRA only taxes 50% of crypto gains, he must pay capital gains tax on $50 i.e. half of his gain.

How are Crypto card rewards Taxed?

Crypto cards often entice users by offering rewards like cashback. Using’s basic card as an example, you can receive a 1% cashback on all qualified spending back in their native cryptocurrency, CRO. Every $100 spent on their card grants you $1 back in CRO.

CRA does not give specific advice on how rewards from crypto cards are taxable. However, investors are given the chance to claim rewards as capital gains or business income.

Rewards such as cashback are likely to be taxed as they are received and at the fair market value when they were received. 

CRAs adjusted cost basis method can make it quite confusing if rewards are received in small amounts over a long period of time. So, it is suggested you simply keep the Canadian dollar value of your total rewards as the cost basis. Any gain made on the rewards will be subject to 50% capital gains tax.You might see something like this apply to cashbacks received on cards when used for services like Netflix and Amazon.

Are Crypto Cards Useful?

Yes! Crypto cards are actually a great way to use extra cryptocurrency that you have to make real life purchases instead of withdrawing large sums into a bank account and then buying with fiat.

If you are bullish on crypto’s long term potential as an alternative to traditional finance, using crypto cards are a great way of doubling down on your prediction!

The Best Crypto Cards to Try

The amount of crypto cards being offered is blowing up, here are some of the best crypto cards to get you started in paying with cryptocurrency.

  • Visa Card (larger rewards)
  • Gemini Credit Card
  • Coinbase Visa card
  • BlockFi rewards card


Crypto cards may not be for everyone but they are not as complicated as they may seem. For most, it can be an easy way to earn cashback on purchases that they would have made with a regular debit card anyway. So, why not take the free rewards?\

Disclaimer: CRAs relationship with Cryptocurrency

Although CRA continues to slowly create guidelines for Canadians investing in cryptocurrency, they are still way behind several other developed countries when it comes to the rules surrounding taxation. Many DeFi protocols, such as yield farming and staking are yet to receive proper guidance from CRA. We should expect to see the number of guidelines rapidly increase as Canadian investors call for them but until then, crypto investors have to take positions that may or may not be accepted by CRA. 

*Opinions are for discussion purposes only. This does not represent the views of MetaCounts Cashflow Inc. or its affiliates. Furthermore, this does not constitute legal, accounting, or tax advice of any kind and should not be relied upon as such.

Share on :

Related Blogs