Coinbase Review: A Legit Crypto Exchange for Canadians?
The easiest way to purchase cryptocurrency is through a cryptocurrency exchange. Many crypto trading platforms support dozens, if not hundreds of coins, making it easy for you to manage your digital assets in one place. But with so many crypto exchanges to choose from, how do you know which one is right for you?
In this Coinbase Review, I take a close look at one of the world’s most popular cryptocurrency exchanges. I cover the most important features, pricing for Canadian users, and the pros and cons. I let you know if Coinbase is worth it for Canadians, and share a few alternatives.
Coinbase is the largest cryptocurrency exchange in the US in terms of volume. The company was founded in San Francisco in 2012 but no longer maintains a central headquarters; its employees are fully remote. Coinbase is available in over 100 countries, including Canada, but there are limitations based on where you live, so it’s important to know what you can and can’t do with Coinbase if you live in Canada.
How to Use Coinbase in Canada
To join Coinbase, you must meet the following conditions:
- Be 18 years of age or older
- Provide government-issued photo ID
- Have a computer or smartphone and an internet connection
- Have an active phone number to receive text messages
- Make sure your browser is up-to-date (Coinbase recommends that you use Chrome)
If you qualify, opening a Coinbase account is very straightforward. Here are the steps to follow to open a new account:
- Head to the Coinbase website and click “Get Started.” You can use your mobile phone, Coinbase doesn’t recommend it. Coinbase will ask for your full name and email address, and you’ll need to create a password.
- Verify your email address. Coinbase will send you a verification email to the address you provide. Click the link provided in the email.
- Confirm your phone number. Coinbase uses 2-step verification for added security. When you sign in to Coinbase, you’ll be asked to provide your phone number. Coinbase will text you a 7-digit code. Enter the code and select “Submit.”
- Add your personal information. Coinbase will ask you to provide some basic personal information, including your date of birth and address. They’ll also ask you some basic questions, such as your employer and occupation.
- Verify your identity. Coinbase must verify your ID to comply with Know Your Customer (KYC) laws. Canadian users can provide a piece of government-issued photo ID, like a driver’s license or passport. You will need to upload a picture of your ID using your computer’s webcam or by taking a picture with your mobile phone.
- Link your account to Coinbase. Once your ID has been verified, you must set up a funding method. Canadian users can deposit funds to Coinbase instantly using their debit card (You can’t connect a Canadian bank account to Coinbase.) Head to the “Payment Methods” page to add your debit card. Coinbase no longer accepts credit cards for account funding.
You can buy and sell more than 100+ crypto assets through Coinbase, including the following popular coins:
- Bitcoin (BTC)
- Bitcoin Cash ( BCH)
- Ethereum (ETH)
- USD Coin (USDC)
- Uniswap (UNI)
- Stellar Lumens (XLM)
- Aave (AAVE)
- Litecoin (LTC)
- Cardano (ADA)
- Wrapped Bitcoin (WBTC)
- Internet Computer (ICP)
- Maker (MKR)
- Cosmos (ATOM)
- Polygon (MATIC)
- Tether (USDT)
How to Buy Crypto on Coinbase
Buying and selling crypto is incredibly easy with Coinbase. Here are the steps to buy Bitcoin via the desktop app. (You can also trade on Coinbase’s mobile app).
- Sign into your Coinbase account.
- Click the blue “Buy” button at the top right of your screen.
- Enter the amount you want to purchase (in Canadian dollars).
- Select your payment method.
- Confirm your purchase by clicking on the “Preview Buy” button.
- If you’re ready to proceed, execute your purchase by selecting “One-Time Purchase.”
Coinbase pricing may be the crypto exchange’s weakest point, at least for Canadians.
The fee to purchase crypto with your debit card (the only option for Canadians) is 3.99%, which is very high compared to other crypto exchanges. In addition to the purchase fee, you will pay about 0.50% on the spread when you buy and sell. This is also higher than the leading Canadian crypto exchanges.
You can get reduced pricing on their Pro platform, but you can’t use Canadian fiat currency on Coinbase Pro, making it a moot point for most Canadian traders.
Coinbase has several products in addition to its crypto trading platform. Not all of them are available to Canadian customers, but some key ones are. Here’s a look at their main products and services.
Coinbase Learning Rewards
Coinbase Learning Rewards is available to Canadian users. You can earn crypto by completing educational tutorials that are designed to teach you about different types of crypto. You can access the available video courses from your crypto account.
After watching the videos, Coinsmart will have you complete a brief quiz demonstrating that you’ve learned the material. You’ll receive crypto in your Coinbase account for every quiz you complete.
The following crypto rewards were available as I was writing this post: GPH ($4), AMP ($3), SHPING ($15), NEAR ($3), and ACS ($3).
You can now earn rewards on your crypto in two ways through Crypto Earn: Staking and Defi Yield. According to Coinbase, you can earn up to 6.00% APY on your crypto.
All you need to do is own the asset (coin) you want to stake and opt in by clicking a couple of buttons in your Coinbase account. If you’re unfamiliar with how staking and Defi yield works, here is a basic description:
What Is Staking?
Staking is a way to verify and secure transactions on blockchains that are built on a proof of stake model. Proof of stake is more energy efficient than other types of blockchain methods, like proof of work. When you stake, you delegate a specific amount of crypto and, in turn, are rewarded by Coinbase. You cannot trade any crypto holds while it’s being staked. In a way, staking is kind of like a high-interest savings account for your crypto assets, without the principal guarantee.
What Is Defi yield?
With staking, you are helping to secure the blockchain, but with Defi yield, you lend your crypto assets to a 3rd party to earn rewards. By choosing Defi yield through Coinbase, they handle all the details, making the process easy for investors.
Coinbase Credit Card (not available in Canada)
Coinbase has its own Visa Debit card, known as Coinbase Card. The card makes it easy to spend your cash or crypto, and you can earn crypto rewards on every purchase. Unfortunately, the card isn’t available to Canadian users at this time.
Coinbase Pros and Cons
Coinbase is a massively popular crypto platform in the US, but does it work for Canadians? Here is my list of pros and cons:
- Available in Canada
- Supports over 100 coins
- Educational tools that earn rewards
- Earn rewards through staking and Defi yield
- High fees
- Debit card only funding option
- Coinbase Card not available in Canada
- Can’t transfer to a Canadian bank account
Coinbase and Canadian Bank Accounts
Canadians who are considering opening a Coinbase account need to be aware that you cannot sell your crypto and transfer directly to your bank account. Your only option is to transfer funds to a PayPal account, then move them to your bank account. It’s not terrible but isn’t as convenient as the options provided by most Canadian cryptocurrency exchanges, like Bitbuy and Coinsmart. Unfortunately, Coinbase doesn’t disclose this detail very clearly on its website.
There are several drawbacks to using Coinbase in Canada, including high fees and the inability to link your bank account to Coinbase. The good news is that Canadian crypto traders have other options for trading crypto. Here are three solid Coinbase alternatives:
Bitbuy is a Canadian-based crypto exchange that offers transparent, competitive pricing and an excellent trading platform. Trading fees range from 0.10% to 0.20%, which is much cheaper than Coinbase.
Beginners will appreciate Bitbuy’s Express Trade platform, while experienced traders can take advantage of the advanced Pro Trade platform. You can also trade from your iOS or Android device using Bitbuy’s mobile app.
As a Canadian crypto exchange, Bitbuy is registered with FINTRAC. They also employ 2-step authentication and offer 95% cold storage for added security. You can trade more than 25 crypto coins with Bitbuy.
Like Bitbuy, Coinsmart is another well-established Canadian crypto exchange. They currently support 16 different coins. Unlike Coinbase in Canada, you can fund your account in several ways, including Interac e-Transfer, wire transfer, or with your credit or debit card. Crypto trades are a competitive 0.20%
Canada’s largest robo-advisor also deals in Crypto. Originally, you could only trade Bitcoin and Ethereum, but they now support more than 50 coins. You can also stake Ethereum and Solana with just a couple of clicks, and earn up to 4.5% APY.
There are no fees for deposits and withdrawals, however, Wealthsimple’s trading fees of 1.5% to 2% are higher than many competitors. And you can’t transfer crypto to and from your account, you can only move fiat currency in and out. You can fund your account via e-Transfer or wire transfer.
Wealthsimple Crypto may not appeal to sophisticated traders who need maximum functionality, but it’s a great way for beginner traders to get started.
Coinbase Canada Review: Final Thoughts
Coinbase is a global crypto platform that’s popular in the US. Unfortunately, it doesn’t work so well for Canadians, due to several limitations. For starters, you can’t link a Canadian bank account, which forces you to send withdrawals to PayPal first. And when you fund your account via debit, there’s a 3.99% fee, before you’ve purchased your crypto.
I do like that you can earn rewards by watching their educational videos and you can take advantage of staking and Defi yield through Coinbase Earn. But you can also stake through Canadian exchanges with lower fees and more account funding options.
The bottom line? If you want to trade crypto, bypass Coinbase and go with a trusted crypto exchange based in Canada, like Bitbuy, Coinsmart, or Wealthsimple Crypto.