Can Charities in Canada Accept Cryptocurrency Donations?

As the world becomes more digital, the way we donate money is also changing. Cryptocurrency donations have gained popularity over the past few years, but what does this mean for charities in Canada? Can they accept these donations, and if so, what are the legal implications, benefits, and challenges?

This article will explore the ins and outs of accepting cryptocurrency donations in Canada and what charities need to know to make informed decisions.

‍What Is Cryptocurrency?

Before diving into whether charities can accept cryptocurrency donations, let’s first understand what cryptocurrency is. Cryptocurrency is a type of digital or virtual currency that uses cryptography for security. Bitcoin, Ethereum, and Litecoin are some of the most popular cryptocurrencies. Unlike traditional currencies, which are issued by governments (such as the Canadian dollar), cryptocurrencies are decentralized and not controlled by any central authority.

Can Charities Accept Cryptocurrency in Canada?

The simple answer is yes, Canadian charities can accept cryptocurrency donations. However, the process comes with some specific requirements and considerations. As of now, cryptocurrency is not classified as legal tender in Canada, meaning it cannot be used in the same way as regular money for all purposes. That said, charities are allowed to accept cryptocurrency donations, but they must comply with certain legal and regulatory guidelines.

‍Legal Considerations for Charities Accepting Cryptocurrency

1. Tax Implications: One of the biggest concerns for charities when accepting cryptocurrency is how donations are taxed. The Canada Revenue Agency (CRA) treats cryptocurrency as a commodity, not currency. This means that when a charity receives cryptocurrency as a donation, the value of the donation must be reported at the time of receipt based on the fair market value (FMV) of the cryptocurrency.
2. If the charity sells the cryptocurrency, they may need to pay capital gains tax, which could affect the net amount they ultimately keep. However, if the cryptocurrency is held as an asset rather than sold immediately, this could be a different tax scenario. Charities should consult with a tax professional or legal advisor to understand the tax implications specific to their situation.
3. Receipting: Charities in Canada are required to issue official donation receipts for tax purposes. The CRA allows cryptocurrency donations to be receipted, but this is only possible if the donation is converted to Canadian dollars (CAD) or another fiat currency at the time of receipt. This conversion ensures that the donation can be easily valued for tax purposes. Therefore, the charity must have a system in place to calculate the FMV of the cryptocurrency at the time it is donated.
4. Compliance with Anti-Money Laundering (AML) and Know Your Customer (KYC) Regulations: Charities must ensure they are not inadvertently involved in illegal activities like money laundering. Cryptocurrency transactions, while typically secure, are sometimes used to mask the origins of funds. As a result, charities need to comply with Canada's Anti-Money Laundering (AML) and Know Your Customer (KYC) regulations.
5. Charities may need to verify the identity of the donor in some cases, especially if the donation is large or comes from an unusual source. Some cryptocurrency exchanges and platforms offer AML/KYC services that help charities ensure the legitimacy of the donation.

Benefits of Accepting Cryptocurrency Donations

1. New Donor Base: Accepting cryptocurrency donations can help a charity reach a younger, tech-savvy audience. Many cryptocurrency enthusiasts are passionate about using their digital wealth for good, and they may prefer to donate in cryptocurrency rather than traditional methods like cash or credit card.
2. Low Transaction Fees: Cryptocurrency transactions often have lower fees compared to traditional payment methods like credit card payments. This can help charities keep more of the donation rather than losing a significant portion to transaction fees.
3. Global Reach: One of the advantages of cryptocurrencies is that they are not tied to any particular country. Donors from around the world can contribute to a Canadian charity without worrying about exchange rates or international banking fees. This global accessibility can be especially valuable for charities looking to expand their donor base.
4. Increased Donations: Some studies suggest that donors who hold cryptocurrency may be more likely to donate, especially if the donation is tax-efficient. Because cryptocurrency is considered a capital asset, some donors may choose to donate it directly to a charity to avoid paying capital gains tax on it. This can result in a larger donation for the charity.

Challenges of Accepting Cryptocurrency Donations

1. Volatility: One of the biggest challenges of accepting cryptocurrency donations is its volatility. The value of cryptocurrencies can fluctuate dramatically over short periods, which may affect the value of a donation. For example, if a donor gives $1,000 worth of Bitcoin, its value may drop or rise significantly by the time the charity converts it to Canadian dollars.
2. Charities need to have a clear strategy for dealing with this volatility. Some may choose to convert the cryptocurrency to fiat currency immediately upon receipt to avoid any potential losses. Others may hold onto the cryptocurrency as a long-term asset, betting that its value will rise over time.
3. Technical Complexity: Accepting cryptocurrency donations may require charities to invest in the right technology and training for staff members. They need to have a secure wallet to store the cryptocurrency, and the process of accepting and converting it can be more complex than traditional donation methods.
4. Additionally, some charities may lack the technical expertise to handle cryptocurrency donations safely, so partnering with a cryptocurrency payment processor or a tech firm that specializes in this area may be necessary.
5. Public Perception: While cryptocurrencies are becoming more mainstream, there are still some concerns about their legitimacy, especially in relation to illegal activities. Some donors may be hesitant to donate cryptocurrency due to concerns over its association with illicit activities or environmental impact (as mining certain cryptocurrencies can consume large amounts of energy).
6. Charities must weigh the benefits of accepting cryptocurrency donations against the potential risks related to public perception. It’s important for charities to communicate clearly with their supporters about why they are accepting cryptocurrency and how it will be used responsibly.

Steps for Charities to Accept Cryptocurrency Donations

1. Choose a Cryptocurrency Payment Processor: One of the easiest ways for a charity to start accepting cryptocurrency donations is by partnering with a cryptocurrency payment processor. These platforms can handle all the technical aspects of the transaction, including converting the cryptocurrency to fiat currency if needed. Popular payment processors for cryptocurrency include BitPay, Coinbase Commerce, and CoinPayments.
2. Create a Cryptocurrency Wallet: A secure cryptocurrency wallet is essential for holding any cryptocurrency donations. There are various types of wallets available, including software wallets, hardware wallets, and exchange-based wallets. The choice of wallet depends on the charity’s security needs and technical expertise.
3. Develop a Donation Page: Charities can set up a donation page on their website where donors can contribute cryptocurrency. This page should include instructions on how to make a donation, the types of cryptocurrencies accepted, and how the charity will handle the donations.
4. Ensure Compliance: Before accepting cryptocurrency donations, charities should ensure they are compliant with all relevant Canadian laws and regulations, including tax laws and anti-money laundering regulations. Consulting with legal professionals and accountants who specialize in cryptocurrency is a good idea.
5. Monitor and Adapt: Cryptocurrency is a rapidly evolving field, and charities that accept it must be prepared to adapt to new developments. This includes monitoring changes in tax law, payment processors, and the overall cryptocurrency landscape to ensure continued compliance and optimal donation processing.

Cryptocurrency Donation Trends in Canada

The cryptocurrency landscape is evolving rapidly in 2025. Here's what Canadian charities need to know about current trends.

Growing Crypto Adoption Among Canadians

Over 42.3% of Canadians now own some form of crypto asset. This represents a significant donor pool for charities.

Ethereum leads the way for Canadian users at 32% of transaction volume. Bitcoin follows at 29%, with Solana at 22%.

The demographics are clear. The 20-24 age group accounts for 21% of completed transactions in 2024. This younger demographic represents the future of charitable giving.

Popular Cryptocurrencies for Donations

Many charities now accept multiple cryptocurrency types. Bitcoin (BTC), Ether (ETH), Litecoin (LTC), Bitcoin Cash (BCH), Zcash (ZEC), Gemini Dollar (GUSD), Basic Attention Token (BAT), Chainlink (LINK), 0x (ZRX), Storj (STORJ), Dai (DAI), Amp (AMP), The Graph (GRT), Enjin (ENJ), and Dogecoin (DOGE) are commonly accepted.

The trend shows donors prefer mainstream cryptocurrencies. This makes sense for charities looking to minimize complexity.

Enhanced CRA Scrutiny and Audit Risk in 2025

The Canada Revenue Agency has significantly increased its focus on cryptocurrency activities. This includes charitable donations.

Current CRA Audit Practices

The CRA is actively identifying crypto investors using data from cryptocurrency exchanges and issuing 13-page questionnaires about crypto dealings.

CRA now includes cryptocurrency questions in general charity audit questionnaires. Even small donation amounts can trigger audits.

What Charities Should Know

The reality is sobering for charities. Based on anecdotal evidence, charities accepting cryptocurrency should probably get ready for a CRA audit.

Some audits involve hundreds or thousands of dollars in cryptocurrency donations - amounts so small they don't meet withdrawal thresholds on some platforms.

Gift-in-Kind Classification

Cryptocurrencies are treated as "gifts-in-kind" when donated to charity, unlike public securities that receive extra tax incentives.

This classification has important implications. Donors must pay capital gains tax but only receive regular donation receipt benefits.

Platform Changes and Service Disruptions

The cryptocurrency donation landscape has experienced significant changes in 2025.

CanadaHelps Service Interruption

CanadaHelps is no longer accepting cryptocurrency donations due to unforeseen changes with their previous cryptocurrency partner. This affects many Canadian charities who relied on this service.

Alternative Platforms

Several specialized platforms continue to serve Canadian charities:

• The Giving Block remains active with their comprehensive donation platform
• Cryptogiving.ca maintains a directory of Canadian charities accepting cryptocurrency

Risk Assessment for Small Charities

Most experts now recommend a cautious approach for smaller organizations.

Cost-Benefit Analysis

For most charities, they would be better off having a simple policy that they do not accept cryptocurrency. The audit risk may outweigh potential benefits.

From a risk perspective, charities should ask if it is worth the extra risk for such a small amount of funds.

When to Consider Cryptocurrency

The threshold for consideration is clear. If you have a donor who wants to give you $1 million and insists that it be in cryptocurrency you should definitely look into it.

Future Outlook for 2025 and Beyond

Despite current challenges, the cryptocurrency donation sector shows promise for growth.

Global Trends

In 2024 alone, it is estimated that over $2 billion in crypto was donated to nonprofits globally. With the crypto market continuing to show strength, alongside a supportive political climate, we expect 2025 to blow 2024 out of the water.

Generational Shift

With cryptocurrency being the primary mode of investment for Gen Zs, and a Great Wealth Transfer beginning to move trillions of dollars into the hands of crypto investors, nonprofits are understandably bracing for the outsized role that crypto giving will play in philanthropy moving forward.

Practical Recommendations for 2025

Based on current trends and regulatory environment, here are updated recommendations:

For Small Charities (Under $1M Annual Budget)

Consider avoiding cryptocurrency donations entirely. The audit risk and compliance costs may exceed benefits.

If you must accept crypto, ensure you have:

• Professional legal and accounting support
• Comprehensive policies and procedures
• Immediate conversion protocols to minimize volatility risk

For Medium to Large Charities

Cryptocurrency donations may be worth exploring if you have:

• Dedicated compliance resources
• Technical expertise or partnerships
• Clear donor demand for crypto options

Essential Documentation

All charities accepting cryptocurrency must maintain detailed records:

• Fair market value calculations at time of receipt
• Conversion transactions and fees
• Donor verification documentation
• All exchange platform records

Updated Legal Compliance Requirements

Recent developments have created new compliance obligations for charities.

Enhanced CRA Powers

Budget 2024 introduced significant enhancements to CRA audit powers, including the ability to compel taxpayers to attend interviews and provide written statements under oath.

These changes affect all taxpayers, including charities dealing with cryptocurrency.

Record Keeping Standards

The CRA now requires crypto-asset users to keep detailed records including receipts for hardware, expenses, mining pool arrangements, and fair market value documentation.

Charities must apply these standards to donation activities.

Conclusion

‍Cryptocurrency donations present a new opportunity for charities in Canada to connect with a wider range of donors, streamline donation processing, and potentially increase their revenue. However, accepting these donations comes with legal, technical, and financial considerations that must be carefully addressed. By understanding the benefits, challenges, and regulatory requirements, Canadian charities can make informed decisions about whether to accept cryptocurrency donations and how to implement a safe, efficient system.

Ready to explore cryptocurrency donations for your charity? 

B.I.G. Charity Law Group can help you navigate the complex legal and compliance requirements. Our team understands the unique challenges charities face when implementing new donation methods and can provide the guidance you need to make informed decisions.

Whether you're considering accepting cryptocurrency donations or need help with CRA compliance issues, we're here to support your organization. Contact us at dov.goldberg@charitylawgroup.ca or call 416-488-5888 to discuss your specific needs.

Don't navigate these complex waters alone. Visit CharityLawGroup.ca or schedule a FREE consultation today to ensure your charity stays compliant while exploring innovative fundraising opportunities.

Frequently Asked Questions

Have questions about cryptocurrency donations for your Canadian charity? Here are quick answers to the most common concerns we hear from nonprofit organizations exploring digital currency fundraising.

Who accepts cryptocurrency in Canada?

Many Canadian businesses and organizations now accept cryptocurrency, including major automotive groups like HGregoire, restaurants like Toronto Brewing, and various charities such as Action Against Hunger Canada. 

Over 42.3% of Canadians own some form of crypto asset, driving increased acceptance across different sectors. However, acceptance varies widely, and each organization must implement proper compliance measures before accepting digital currencies.

Can charities accept cryptocurrency?

Yes, Canadian charities can legally accept cryptocurrency donations, but they must comply with specific CRA regulations and treat these as gifts-in-kind rather than currency. 

Charities must convert cryptocurrency to Canadian dollars at the time of receipt to issue proper tax receipts and report the fair market value to the CRA. However, many experts recommend smaller charities avoid cryptocurrency due to increased audit risk and compliance complexity.

Does Canada accept cryptocurrency?

Canada does not recognize cryptocurrency as legal tender, meaning it cannot be used for all purposes like traditional currency. 

However, the government allows cryptocurrency transactions and treats them as commodities for tax purposes. 

The CRA requires individuals and organizations to report cryptocurrency gains, losses, and income on their tax returns, and has significantly increased audit activities targeting crypto users.

What qualifies as a charitable donation in Canada?

A charitable donation in Canada must be made to a registered charity, provide no benefit to the donor beyond a tax receipt, and be given voluntarily without expectation of return. 

The donation must have a fair market value that can be determined, and the charity must issue an official donation receipt for amounts over $20. Cryptocurrency donations qualify but are treated as gifts-in-kind and must be converted to Canadian dollars for proper receipting.

Can a charity hold Bitcoin?

Yes, charities can hold Bitcoin and other cryptocurrencies as assets, but this creates additional compliance and risk management challenges. 

Most experts recommend converting cryptocurrency to Canadian dollars immediately upon receipt to avoid volatility risk and simplify tax reporting. 

Charities that choose to hold cryptocurrency must have proper security measures, detailed record-keeping procedures, and clear policies for managing digital asset volatility.

What is proof of donation in crypto?

Proof of donation in crypto includes the official tax receipt issued by the charity based on the Canadian dollar value at the time of donation, blockchain transaction records showing the transfer, and documentation of the fair market value calculation used for the receipt. 

Donors should keep records of the cryptocurrency's acquisition cost, transfer details, and any exchange fees paid, as these may be needed for tax reporting purposes since crypto donations are subject to capital gains tax.