Status of Bitcoin in Different Countries all over the World
Sep 07, 2020 06:00
After the inception of bitcoin, a new way of investment has emerged. The trend of investment in digital currencies rapidly gained traction over the years. Despite that, governments, financial institutions, tax authorities are debating on its usage and regulations.
Above all, most investors are still not clear with the legal status bitcoin. The fact is bitcoin is legal in some countries, whereas many countries have banned it. In this article, I am going to share two lists of countries depicting the legal status of bitcoin. Before that, I will share why bitcoin is banned in some countries.
Why is Bitcoin Banned in Some Countries?
Bitcoin is backed by a decentralized distributed ledger technology called the blockchain. It provides anonymous features to the users and does not allow any third party like governments or banks to authorize the transactions. Despite many potential benefits of the new concept and technology, there are some downsides to it. Here is why some countries restricted the usage of bitcoin.
●Fraudsters and cybercriminals are using bitcoin and blockchain for money laundering.
●Criminals and terrorist organizations are taking advantage of this for trading weapons and drugs.
●Governments have no control over the transactions of bitcoin.
●Bitcoin is a threat to the traditional currencies, which may take away the businesses of central banks.
Due to the above reasons, some governments do not legalize bitcoin in their countries. Apart from this, some countries also want to wait for some years before fully accept it. Now let us see the status of bitcoin in different countries.
Countries where Bitcoin is Legal
There are many countries where bitcoin is legal. Here I have only listed some of the popular countries such as the USA, the EU, Australia, Canada, etc.
The United States is one of the early adopters of bitcoin. Although many government agencies restrict the usage of bitcoin, it is widely accepted throughout the country. However, it is not considered as legal tender, rather it is announced as a property IRS.
Bitcoin is allowed for trading, investing, payments for goods, and services inside the country. Recently, a court has announced that lawyers can also accept payments in bitcoin.
The Europian Union
The Europian Court of Justice passed judgment for buying and selling of the digital currencies to exempt for the VAT. However, different countries have developed their own rules for the usage of bitcoin and other virtual currencies.
Bitcoin is considered as a commodity in Finland, not a currency. The central board of taxes has exempted VAT and considered it as a financial service. Germany has also exempted the VAT, but the government has imposed different rules and regulations on its usage.
Australia considers bitcoin as a form of an asset but not a legal tender or foreign currency. It is allowed for trading, and investing for the capital gains tax purpose.
With a number of regulations, Canada allows the usage of cryptocurrencies, ensuring that there is no case of money laundering. Bitcoin is considered as a commodity by the Canada Revenue Agency.
However, some banks in Canada have restricted the usage of bitcoin. They banned their debit and credit cards from buying bitcoins. In some major parts of Canada, there are strict rules and regulations for bitcoin.
Countries Where Bitcoin is Illegal
Although many countries have accepted bitcoin, however, it is not legal to use bitcoin in some countries. Some of the major reasons are its anonymous feature, thereat to the current monetary system, its volatility, and involvement in criminal activities. Here are some countries that do allow the usage of bitcoin
Bolivia: Bolivia banned the usage of bitcoin along with other digital currencies.
China: The Chinese government banned the transactions of bitcoin and other virtual currencies. It has also imposed restrictions on bitcoin miners.
Russia: It is not legal to use bitcoin in Russia as it is not regulated.
Vietnam: The Vietnam government announced that bitcoin is neither a currency nor an investment asset.
Now you are aware of the countries where bitcoin is not legal. If you don’t find your country on the above list, you can check the status of your country on the internet. If it is legal in your country, you can explore one bitcoin a day to store them securely. Hopefully, the article has provided you the useful information on the status of bitcoin.
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