Donating Bitcoin in Canada: A Practical Guide for Givers and Charities (2025)

Cryptocurrency donations are growing in Canada as donors and charities discover the benefits of accepting Bitcoin. Donating Bitcoin can be tax-efficient for givers and open new funding channels for charities, but the process requires attention to custody, valuation, and regulatory rules. This guide covers how donors should prepare, how charities can accept and account for crypto gifts, and practical safety tips for both parties. Whether you are a Canadian donor considering a Bitcoin gift or a charity planning to accept cryptocurrency, this post lays out actionable steps and checklists to help the transfer go smoothly and compliantly.

Why Donate Bitcoin?

Bitcoin donations offer several advantages compared with traditional fiat gifts. Donors can potentially reduce capital gains tax on appreciated cryptocurrency while supporting causes they care about. Charities gain access to a growing donor base and can receive larger gifts from crypto-native supporters. From a practical perspective, Bitcoin is global, fast, and programmable through payment requests that preserve transparency. That said, both donors and charities must understand valuation, custody risks, and tax reporting rules under the Canada Revenue Agency.

Canadian Legal and Tax Basics

For Donors

  • Cryptocurrency is treated as a commodity by the Canada Revenue Agency. Donating appreciated crypto can have favorable tax treatment compared with selling then donating cash because capital gains tax may be mitigated when donating publicly listed securities or crypto that qualifies as a listed security. Donors should consult their tax advisor for specific treatment.
  • Determine fair market value in Canadian dollars at the time of transfer. Use a reliable exchange price at a specified time. Record the timestamp and source for future verification and receipts.

For Charities

  • Registered charities can accept cryptocurrency. They must issue official donation receipts showing the fair market value in CAD at the time of donation.
  • Anti-money laundering and reporting rules may apply. Charities should have Know Your Donor policies and be aware of FINTRAC considerations if they operate payment services or large cash-like crypto movements.
  • Accounting and audit standards require charities to record crypto donations at fair market value and disclose how crypto holdings are managed or converted to cash.

How Donors Should Prepare: Practical Steps

Step 1. Decide How to Send the Bitcoin

You can send Bitcoin directly from your self-custody wallet, from an exchange (Bitbuy, Coinsquare, or other Canadian platforms), or using a payment provider. Self-custody gives the most control and privacy. Exchanges may offer a simpler experience but check their policies for donation receipts and withdrawal limits.

Step 2. Secure Your Keys and Use a Cold Wallet for Large Gifts

For large donations, use a hardware wallet or another cold storage method to reduce online risk. If you use a hardware wallet, prepare the transaction on an online device and sign it on your offline device if possible. For very large gifts, consider using multisig to add redundancy and security.

Step 3. Verify the Charity's Receiving Address

Never accept an address over an unverified channel. Ask the charity for an official receiving address provided through a verified email domain, an on-site printed QR code at a fundraising event, or a signed message if they provide a wallet public key. Avoid copying addresses from social media without confirming authenticity.

Step 4. Record Price and Timestamp for Tax Purposes

At the moment you broadcast the transaction, note the CAD price of Bitcoin from a reputable exchange and save screenshots or export the transaction data. This information will be needed for your tax records and the charity receipt.

Step 5. Use Secure Transfer Practices

  • Double-check the destination address manually or use a hardware wallet's address verification feature.
  • Prefer SegWit or Bech32 addresses for lower fees where the charity supports them.
  • For high-value transfers, consider sending a small test amount first to confirm the address and receipt process.

How Charities Can Accept and Manage Bitcoin

Option 1. Use a Custodial Provider

Custodial services can simplify accepting and converting crypto to CAD. Providers typically offer compliance, liquidity, and automated donation receipts. However, custodial arrangements mean the charity relies on a third party for security and may incur fees.

Option 2. Self-Custody with Clear Policies

For charities that want full control, self-custody is viable but requires a policy: use hardware wallets, multisig setups, geographically separated signers, and documented procedures for key rotation, emergency access, and accounting. Maintain a cold storage policy and limit hot wallet balances used for day-to-day operations.

Option 3. Hybrid Approach

Many charities use a hybrid model: custodial services for small donations and conversions, and self-custody for large gifts that require board oversight. This balances operational ease and security.

Valuation, Receipts, and Accounting

Valuation Best Practices

Valuation is the fair market value in CAD at the time the charity receives control of the Bitcoin. For wallet-to-wallet transfers, that is typically when the transaction is confirmed on the blockchain. Use a reputable exchange price and record the timestamp, exchange, and rate used to calculate CAD value.

Issuing Official Donation Receipts

Registered charities must issue official receipts that include:

  • Donor name and address
  • Date of donation
  • Description of the property donated (for example, Bitcoin) and the fair market value in CAD
  • A statement confirming the charity is registered

Accounting and Liquidity Management

Charities need a plan for converting crypto to CAD to cover operating costs. Consider staged conversion rules, use of limit orders to reduce market impact, and clear internal controls for who can approve conversions. Document all conversions and the exchange rates used.

Security Considerations for Both Parties

Security is paramount. Below are recommended practices for donors and charities to reduce risk when transferring and holding Bitcoin.

  • Address verification: Confirm receiving addresses through known channels and preferably in person or over verified email.
  • Use hardware wallets: Donors should sign with hardware wallets. Charities should store long-term reserves in hardware wallets or multisig vaults.
  • Multisig for charities: Multisignature wallets distribute risk across multiple custodians or board members and reduce the chance of single-point failure.
  • Test small transfers: Always send a small test amount before transferring large sums.
  • Recordkeeping: Save transaction IDs, screenshots, signed messages, and timestamped price evidence for tax and audit purposes.
  • AML checks: Charities should screen large or suspicious donations and have policies aligned with FINTRAC where applicable.
Best practice: For donations over material thresholds, use multisig custody, require board sign-off, and convert a portion to CAD promptly to cover near-term expenses.

Practical Example: Donating 0.5 BTC

Imagine a donor in Toronto wants to gift 0.5 BTC. Steps and calculations might look like:

  • At the time of transfer, BTC trades at 70,000 CAD per BTC on a reputable exchange. 0.5 BTC value = 35,000 CAD.
  • Donor sends 0.5 BTC from their hardware wallet to the charity's verified Bech32 address. Donor notes the transaction ID and takes a screenshot of the exchange price and timestamp.
  • Charity confirms receipt after required confirmations, records the CAD value, and issues an official tax receipt for 35,000 CAD.
  • If the donor held the Bitcoin as an investment, there may be capital gains implications on the disposed portion. Donor should consult their tax advisor; holding periods and cost basis matter.

Checklist: Donor and Charity Quick Actions

Donor Checklist

  • Verify charity identity and receiving address.
  • Decide whether to send from exchange or self-custody wallet.
  • Record BTC price and timestamp at transfer.
  • Send a small test amount for large transfers.
  • Save transaction ID and proof of value for tax reporting.

Charity Checklist

  • Provide verified receiving instructions and preferred address format.
  • Establish custody policy: custodial, self-custody, or hybrid.
  • Record FMV in CAD at receipt and issue official receipts promptly.
  • Set conversion policy for liquidity and limit market exposure.
  • Document AML checks for large or unusual donations.

Final Thoughts

Donating Bitcoin in Canada is a powerful way to support causes while leveraging the efficiency and global reach of cryptocurrency. Both donors and charities benefit when they follow straightforward security, valuation, and reporting practices. For donors, the priorities are secure signing, verified addresses, and careful recordkeeping. For charities, the priorities are custody policies, receipt accuracy, and liquidity planning. With proper safeguards, Bitcoin donations can expand fundraising possibilities and provide a modern, tax-aware giving option for Canadians and international supporters alike.

If you are planning a significant Bitcoin donation or your charity is preparing to accept crypto gifts, consult qualified tax and legal professionals and build internal policies before accepting large transfers. Small steps taken up front prevent headaches later and ensure the gift has maximum impact.