Cryptocurrency

Updated: July 8, 2025

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Modernizing crypto asset taxation in Canada

Policy Gaps, Enforcement Challenges & Strategic Recommendations


Abstract

This white paper addresses the urgent need to update Canada’s tax framework for crypto assets in light of rapid advancements in blockchain technology. Identifying critical gaps in current CRA guidance and enforcement, it offers strategic recommendations to foster compliance, support innovation, and position Canada as a leader in the digital economy.

Executive summary

The taxation of crypto assets in Canada is currently governed by legacy frameworks that were not designed to accommodate the complexities of decentralized digital finance. While the Canada Revenue Agency (CRA) has issued basic guidance on cryptocurrency transactions, the rapid evolution of blockchain technology — including decentralized finance (DeFi), non-fungible tokens (NFTs), and decentralized autonomous organizations (DAOs) — has outpaced the existing tax framework, leaving significant gaps in clarity, consistency, and enforceability.

This white paper examines the current state of crypto asset taxation in Canada, identifying structural deficiencies in CRA guidance and enforcement, and analyzing how these gaps impact both taxpayers and compliance efforts. It also provides a comparative look at how other jurisdictions are responding to similar challenges, offering useful benchmarks and best practices.

The paper concludes with strategic recommendations designed to modernize Canada’s tax approach to crypto assets. These include clarifying key definitions, issuing guidance on emerging technologies, enabling simplified compliance for small-scale users, improving coordination between regulatory agencies, and addressing specific areas like stablecoins.

Canada now has a timely opportunity to lead in building a tax policy environment that is both innovation-friendly and enforceable — one that encourages compliance, protects taxpayers, and supports the country’s reputation as a forward-looking jurisdiction in the Web3 economy. 


Acknowledgement and credit to Candy M. Davis, CPA, CGA of Davis Accounting & Tax for this original content.

To read more of Candy's publications, visit: Candy's Insight Hub

Modernizing crypto asset taxation in Canada

 

 

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