Looking to buy stablecoins in Canada? In this article, we cover the best and safest ways to buy stablecoins in Canada.
What are Stablecoins and Why do I Need Them?
Stablecoins are pegged 1:1 to fiat currency and the most popular stablecoins are pegged to the US dollar. It means that for every one stablecoin, it is worth one dollar.
Stablecoins are useful for keeping part of your crypto holdings “stable”, since stablecoins are always worth one dollar each, your crypto won’t lose value.
It is also worth it to buy stablecoins so you can pay for goods and services with crypto where you don’t want the value to fluctuate. It can also be handy to keep a stash of stablecoins for when you’re ready to trade them for another coin.
You can also earn profit on your stablecoins in a similar way to crypto staking. Stablecoins can’t be staked, but you can lend out your stablecoins on crypto exchanges in return for yield. The benefit here is that your initial investment won’t lose value like it might if you stake or lend another coin that isn’t pegged to fiat currency.
What are the most popular stablecoins among Canadians?
The most popular stablecoins for Canadians are USDC, USDT, DAI, Binance USD BUSD, and TrueCAD which is pegged to the Canadian dollar.
What is the difference between USDT, USDC, DAI and other stablecoins?
There are different types of stablecoins available. Some are backed 1:1 with fiat currency and others are algorithmic, which maintain their stable price automatically through smart contracts.
Tether USDT and USD Coin USDC are largely the same. Both claim to be backed by US dollars. The difference is that USDC is audited regularly and has proven that for every USDC in circulation there is one US dollar in the vault. As for Tether, they have not been audited yet but remain the most used stablecoin in the world. They claim that USDT is backed by US dollars but this has not been proven.
TrueCAD is a stablecoin by TrustToken which is backed 1:1 with the Canadian dollar in the same way as USDC is backed 1:1 with the US dollar. TrueCAD has also been audited.
DAI is a collateralized stablecoin that is backed by other cryptocurrencies such as Ethereum. Users can deposit crypto as collateral on the MakerDAO app and take out a loan in the form of DAI tokens. When people pay back their loans, the DAI is destroyed. These loans are over-collateralized in case the price of Ethereum drops below the value of the loan, in which case the Ethereum will be sold. This minting and destroying of circulating coins helps keep the price stable. Unlike USDT or USDC, DAI is decentralized because the price is maintained through smart contracts and any changes to the protocol are voted on by the MakerDAO community.
Algorithmic stablecoins rely on two tokens. One being the stablecoin and the other being the coin that backs the stablecoins. Algorithmic stablecoins work via supply and demand, constantly minting and burning new tokens of each coin to maintain a steady price. These types of stablecoins are the riskiest because they do not have any collateral backing them or any fiat currencies held in reserves.
Why do Most Canadian Exchanges offer USDC not USDT?
The Ontario Securities Commission banned Canada’s first regulated Canadian crypto exchanges, Coinberry and Wealthsimple Crypto, from trading Tether USDT on their platforms in 2021. This move comes from Tether’s shady activities including alleged market manipulation and the fact that it is unknown exactly how Tether keeps USDT pegged to the US dollar. Tether is still the most used stablecoin in the world and is available on other Canadian crypto exchanges, but USDC is a safer option since it is proven that it has dollars in its reserves.
You can buy stablecoins on many Canadian exchanges and we’ve listed some below based on ease of use and cost.
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Best Exchanges To Buy Stablecoins in Canada
CoinSmart is a Canadian cryptocurrency exchange that offers a wide range of cryptocurrencies including stablecoins e.g. USDC. You can make deposits on CoinSmart using Interac e-Transfer which has a 1.5% fee for deposits less than $2,000. You can trade stablecoins on CoinSmart easily with its low 0.2% trading fee. CoinSmart is simple to use which makes it a popular choice for beginner investors.
You can sign up here and claim free $20 in bitcoin.
BitBuy is one of Canada’s most trusted and reputable crypto exchanges. Offering some of the lowest trading fees at just 0.1%/0.2%, Bitbuy is the perfect place to buy stablecoins in Canada. Similar to Coinsmart Interac e-Transfers have a 1.5% fee, but the low trading fees makes Bitbuy cheaper than other exchanges. Bitbuy has an Express platform where you can buy stablecoins quickly at market prices, or it has an Advanced platform for those looking for more advanced charting and order book data.
You can sign up here and claim free $20.
NDAX is a popular crypto exchange where you can buy stablecoins in Canada. It offers excellent customer service, a wide range of cryptocurrencies and low trading fees at a fixed 0.2%. Withdrawals cost $25 and you can deposit Canadian dollars on NDAX using Interac e-Transfer for free. NDAX is easy to use and has a wide range of features that are suitable for Canadians looking to buy stablecoins and trade crypto.
You can sign up here.
Crypto.com is a global crypto exchange that offers staking and lending, Visa cards and hundreds of cryptocurrencies. Trading fees can be up to 0.7%, so they are a little higher than some other exchanges, but they offer a wide variety of products and lots of stablecoins including TrueCAD, which is pegged to the Canadian dollar. You can make deposits on Crypto.com using Interac e-Transfer, for free. For larger amounts over $2,000 you can make a wire transfer. Crypto.com offers lending on stablecoins so you can earn yield.
You can sign up here.
Unlike Binance, KuCoin has not stopped trading in Ontario. KuCoin offers hundreds of cryptocurrencies including new ones and many you’ve probably not heard of. KuCoin offers some of the lowest trading fees around but you cannot deposit Canadian dollars directly. You can deposit crypto, or use one of their third-party providers to pay with a credit or debit card to buy stablecoins.
You can sign up here.
How to Keep Stablecoins Safe and Secure in Canada
You can keep your stablecoins safe by moving them from your crypto exchange to a private crypto wallet. Although most exchanges are safe, it is always best to keep crypto in your own wallet. Make sure to keep your seed phrase written down somewhere safe.
How to Sell Stablecoins in Canada
To sell stablecoins in Canada, simply move them back to the crypto exchange where you bought them and click the “sell” or “trade” button. You will be able to sell stablecoins for most other cryptocurrencies available on the exchange or sell them for Canadian dollars. If you’d like to withdraw the money to your bank account, simply find the “withdraw” button.
Can you buy Stablecoins in Canada?
Yes, you can buy stablecoins in Canada.
What is the best way and place to buy Stablecoins in Canada?
You can buy stablecoins on most crypto exchanges but we recommend using the exchanges we listed in this article.
How to trade Stablecoins in Canada?
You can trade stablecoins for most other cryptocurrencies. No matter which crypto exchange you use, there will always be a trading pair for a stablecoin against at least one other cryptocurrency. Simply click the “trade” or “swap” button on the exchange to see the trading pairs available.
Are Stablecoins a good investment for Canadians?
Yes, stablecoins are good for keeping your crypto investments stable until you’re ready to swap them for cryptocurrencies that can rise or fall in value. Stablecoins are also a good investment for lending and generating yield without your initial capital losing value.