Cryptocurrency has steadily gained traction, and many Canadian donors are exploring how to use digital assets to support charities. But the tax treatment of crypto gifts can be tricky. For both donors and charities, it’s important to understand how these donations work and the tax implications that come with them.

Below is a quick primer on how crypto donations are taxed in Canada, the benefits and challenges they present, and what to consider before moving ahead.

How the CRA treats cryptocurrency gifts

In Canada, cryptocurrencies like Bitcoin and Ethereum are not considered currency—they’re property. When you donate cryptocurrency to a charity, the CRA treats it as a gift-in-kind, which triggers specific rules about how it’s valued.

Unlike a cash donation, a gift-in-kind must be receipted at its fair market value (FMV) at the time of the gift. In practice, that means the value is based on the Canadian-dollar equivalent at the moment the asset is transferred to the charity. That can be straightforward for widely traded coins, but volatility (and thin trading in some tokens) can make pinning down FMV more challenging.

Crypto vs. appreciated securities

A key difference between donating cryptocurrency and donating publicly traded securities is tax treatment on gains. In Canada, gifts of appreciated securities receive a preferred rule: capital gains on the donated securities are not taxable, and the donor still receives a receipt for FMV.

Cryptocurrency doesn’t currently receive that special treatment. If you donate crypto, any appreciation is generally subject to capital gains tax. You’ll still receive a charitable tax receipt for FMV, but the overall outcome is typically less favourable than donating appreciated securities.

Challenges for charities

Many Canadian charities aren’t yet set up to accept crypto directly. Two common hurdles are:

1. Technical capacity. Accepting crypto requires secure wallets, procedures to convert to Canadian dollars, and policies for handling price volatility. Building and maintaining that infrastructure can be resource-intensive.
2. Regulatory oversight. The CRA pays close attention to crypto transactions, including valuation and receipting of gifts-in-kind. Charities should expect more scrutiny and ensure their documentation and policies are audit-ready.

Simpler paths for donors

Donors who want to support a charity without adding complexity have options:

• Sell then donate cash. Dispose of the crypto, realize any gains for tax purposes, and donate the proceeds in cash. This avoids the charity needing crypto infrastructure.
• Use an intermediary platform. Some services accept crypto on a donor’s behalf and deliver Canadian-dollar proceeds to the charity, reducing operational burden for the charity.

What might come next

As crypto ownership grows, policy and guidance may evolve. For now, the lack of the special capital-gains exemption (available for publicly traded securities) may deter some donors from gifting crypto directly. Clearer—and potentially more favourable—rules could emerge over time, but they aren’t here yet.

Bottom line

Crypto donations do qualify for charitable donation tax credits, but they come with added complexity and, at present, less favourable tax treatment than gifts of appreciated securities. Donors should speak with a tax professional before donating crypto, and charities should ensure they have appropriate infrastructure and policies in place before accepting digital assets.

Until the landscape changes, a cautious, informed approach—often using a “sell-then-donate-cash” path or a trusted intermediary—remains the most practical way to support charitable work with digital assets.

Daniel Goldgut is the co-founder of Epilogue, an innovative online platform revolutionizing estate planning in Canada. With a background in law and years of experience in private practice, Daniel transitioned from a legal career to entrepreneurship, driven by a passion for making Wills and estate planning more accessible and affordable for everyone. He collaborates closely with charities to enhance their legacy giving programs, helping organizations grow their impact. daniel@epiloguewills.com