Bitcoin in an RRSP or TFSA

RRSP and RRIF

What is allowed: Bitcoin held directly is not a qualified investment; the Nova Scotia Securities Commission notes that cryptocurrencies are not money issued by a government. Most securities listed on a designated stock exchange, including ETF units, are qualified investments. The first bitcoin ETF (Purpose Bitcoin ETF) was approved by the Ontario Securities Commission on 11 February 2021 and listed on the Toronto Stock Exchange.

Watch out for:

• Holding a non-qualified or prohibited investment in a registered plan leads to tax; the two categories are taxed differently.

TFSA

What is allowed: Bitcoin held directly is not a qualified investment; the Nova Scotia Securities Commission notes that cryptocurrencies are not money issued by a government. Most securities listed on a designated stock exchange, including ETF units, are qualified investments. The first bitcoin ETF (Purpose Bitcoin ETF) was approved by the Ontario Securities Commission on 11 February 2021 and listed on the Toronto Stock Exchange.

Tax: If a TFSA acquires a non-qualified investment, the holder owes a tax of 50% of its fair market value when acquired (or when it became non-qualified), reported on form RC243. The 50% tax can be refunded if the investment is disposed of by the end of the next calendar year, unless the holder knew or should have known it was non-qualified. Income from it can face a 100% advantage tax.

FHSA (First Home Savings Account)

What is allowed: Most securities listed on a designated stock exchange are qualified FHSA investments; the CRA's FHSA page does not mention cryptocurrency. Directly held crypto is not a qualified investment.

Tax: If an FHSA trust acquires a non-qualified investment, the tax is 50% of the property's fair market value when acquired or when it became non-qualified; it may be refundable in some cases.