Guide · Canadian tax
How USDC income is taxed in Canada
Getting paid in USDC creates two tax events: income when your client pays you, and a gain or loss when you convert to Canadian dollars. Here's how each one works, with a worked example and the records CRA asks you to keep.
1. When your client pays you: business income
CRA's position is that cryptocurrency isn't government-issued currency, so being paid in it for your work is treated like a barter transaction. You include in your income the value of what you received, in Canadian dollars, at the time you received it.
For a self-employed freelancer, that income goes on your T2125 (Statement of Business or Professional Activities) along with the rest of your business income. It doesn't matter that you didn't convert it to CAD yet: the income is earned when you're paid.
Valuing the payment
USDC is designed to track the US dollar, so a natural, consistent way to value it is the Bank of Canada's daily USD/CAD exchange rate for the day you received it. Whatever method you use, apply it the same way every time and keep the rate with the record.
2. Your cost base: what the USDC cost you
The CAD value you reported as income becomes the adjusted cost base (ACB) of that USDC. Because every USDC is identical to every other, Canadian tax rules average them: your ACB per USDC is the total cost of all the USDC you hold divided by how many you hold. Each new payment changes the average; converting some doesn't.
3. When you convert to CAD: a disposition
Exchanging USDC for Canadian dollars, swapping it for another crypto-asset, or spending it are all dispositions. The gain or loss is what you received (net of fees) minus the ACB of the USDC you gave up.
With a stablecoin the gain or loss is usually small, because it comes only from the USD/CAD rate moving between the day you were paid and the day you converted. It still has to be reported.
Capital or business?
A disposition is either on account of capital (a capital gain or loss, where half of the gain is taxable) or business income, depending on your circumstances. CRA looks at factors like how often you trade and why you hold the asset. If you're unsure which applies to you, this is a question for your accountant.
A worked example
Over two months, a freelancer is paid twice in USDC and then converts part of it on an exchange.
| Mar 3: paid 2,000 USDC at 1.3600 | Income $2,720.00 |
| Apr 14: paid 3,000 USDC at 1.3900 | Income $4,170.00 |
| Pool: 5,000 USDC, cost $6,890.00 | ACB $1.3780 / USDC |
| Apr 30: convert 2,500 USDC, receive (after fees) | $3,480.00 |
| ACB of the 2,500 USDC sold (2,500 × 1.3780) | $3,445.00 |
| Business income (T2125) | $6,890.00 |
| Gain on conversion ($3,480.00 − $3,445.00) | $35.00 |
| Remaining: 2,500 USDC with a cost base of | $3,445.00 |
What about GST/HST?
GST/HST is about the service you supply, not how you're paid. If you're registered, you charge GST/HST on taxable supplies whether the client pays in CAD or USDC, and services to non-resident clients are generally zero-rated. See GST/HST for foreign clients.
Records to keep
CRA asks crypto-asset users to keep, for at least six years:
- The date of each transaction and its value in Canadian dollars at the time.
- What each transaction was for and who the other party was (even if only their wallet address).
- The addresses of the wallets you use, with balances and their cost at the start and end of each year.
- Exchange records, and receipts for costs such as accounting and software.
How Mintare helps
Mintare records each USDC payment as income at the Bank of Canada rate, keeps your weighted-average ACB, imports conversions from Kraken, and exports a ledger and year summary for your accountant. Try the free USDC ACB calculator to see the method in action.
Official sources
- CRA: Information for crypto-asset users and tax professionals ↗
- CRA: Reporting income from crypto-asset transactions ↗
- CRA: Determining the value of crypto-assets ↗
- CRA: Keeping books and records of crypto-assets ↗
This page is general information, current as of October 2026, and isn't tax, legal or financial advice. Your situation may differ, so check with a qualified accountant before you file.
Let Mintare keep these numbers for you
Income at the Bank of Canada rate, ACB and gains on every conversion, and exports for your accountant.
Questions
Is USDC treated like US dollars for Canadian tax?
No. USDC is a crypto-asset, not government-issued currency, so CRA treats a payment in USDC like a barter transaction. You include the value of what you received in your income, in Canadian dollars.
Which exchange rate should I use to value a USDC payment?
CRA expects a reasonable, consistent valuation in Canadian dollars at the time of the transaction. Because USDC tracks the US dollar, many people use the Bank of Canada's daily USD/CAD rate for the day they were paid. Whatever method you choose, apply it consistently and keep a record of it.
Do I pay tax twice, once when I'm paid and again when I convert?
No. You pay tax on the income once. When you convert, only the difference between the CAD you get and the cost base of that USDC (which is the value you already reported as income) is a gain or loss. With a stablecoin, that difference is usually small.
Is the conversion gain a capital gain or business income?
It depends on your circumstances. CRA looks at how and why you hold the asset. Many freelancers who simply convert their pay will treat it as capital, where half the gain is taxable, but if your crypto activity is itself a business, it's business income. Ask your accountant.
What if I pay a subcontractor in USDC?
Spending USDC is also a disposition: you're treated as selling it for the value of what you bought. Record the date, the value in CAD and the cost base used.
How long do I keep my records?
At least six years from the end of the last tax year they relate to. CRA lists the details to keep, including dates, values in CAD, the other party, and your wallet addresses.