The decision follows a move by the Toronto-Dominion Bank (TD Bank), which announced in late February that it would be restricting its customers from using the bank’s credit cards to purchase cryptocurrency. It remains unclear whether other Canadian banks will follow suit. In a statement made to The Globe and Mail, the Royal Bank of Canada (RBC) cautioned customers that drops in the value of purchased cryptocurrencies may expose clients to higher levels of debt than they are able to repay. The Bank of Nova Scotia (BNS, Scotiabank) also advised that it was currently in the process of reviewing its policy on cryptocurrency transactions.
With Canadian Banks Targeting Cryptocurrency Transactions – Users Turn to Alternatives
As financial institutions consider restricting cryptocurrency transactions, Canadian seeking to exchange cryptocurrency are increasingly exploring alternative solutions, such as turning to peer-to-peer solutions including Local Bitcoins and Cancoin. Where available, Bitcoin and other cryptocurrency “ATMs” are also an option. Cryptocurrency ATMs are also known as “automatic exchangers”. Unlike traditional ATMs, they do not connect directly to a user’s financial institution or the Interac service. The ATMs work by converting deposited bills into cryptocurrency (usually Bitcoin), deducting transfer fees, and moving the remaining cryptocurrency into a specified wallet. While cryptocurrency ATMs allow users to exchange cash for cryptocurrency, and in some cases, exchange cryptocurrency for cash, most ATMs only provide services in Bitcoin and transfer fees can vary.
Some Canadians are also moving their retail banking accounts to co-operative financial services providers, including local credit unions (or caisses populaires in French). Credit unions are primarily regulated at the provincial level and may or may not have crypto-friendly policies and practices. However, even if your financial institution or local credit union permits cryptocurrency transactions, risk-conscious consumers should be aware that if the funds are held in a currency other than CAD, deposit insurance protections may not apply.