2017 was an incredible year for Bitcoins. Multiple landmarks were crossed in the year. While the currency started off at a price of $970 - it soon crossed the $5000, $10,000, $15,000 and almost reached $20,000. It was a year of unprecedented growth and witnessed a major spike in mainstream awareness. While most countries view Bitcoin with major speculation, there are some countries where Bitcoin is legal!
Why is Bitcoin’s Legality Controversial?
Bitcoin’s legality is quite a controversial issue as almost every country has rejected it as a legal tender. This is primarily because of the fact that Bitcoin is a decentralized cryptocurrency. Currency, in the traditional sense is created by the government and backed by banks and other financial institutions. However, when it comes to Bitcoins, there is no governing body which regulates it. This leads to extreme volatility in the price which isn’t good for economic systems.
However, there are some nations which have been lenient towards this currency of the future and have given it legal or quasi-legal status. Let us take a closer look at the legal status of Bitcoins across various nations:
Legal Status of Bitcoins in Various Countries:
There are only a few countries where Bitcoin is legal (or semi-legal). Let us take a detailed look at all these nations and their laws regarding the legality of Bitcoin.
Bitcoin is (almost) legal in the USA
While it is not officially legal in the US, the government has classified cryptocurrencies as MSB (Money Services Business). The US government has been more open and positive about Bitcoin compared to many other nations. Several government bodies have been instructed that all Bitcoin transactions need to be carried out only in legal terms.
The US Department of Treasury’s Financial Crimes Enforcement Network has also been researching on this cryptocurrency for quite some time now. Bitcoin also has its presence in the US derivatives market.
Are Bitcoins Legal in Canada?
Similar to the US, Canada too is quite open about possibly adapting Bitcoins as an alternative form of payments in the future. Various government departments in the country are investigating the country are investigating this new, revolutionary tech which has the potential to change the way we know our economic system to be.
In Canada, Bitcoins are classified as a commodity. Legally, this means that all transactions in Bitcoins in Canada are legally termed as a barter trade and all Bitcoin generated income in Canada is basically ‘business income’. In addition to Bitcoins, Canada is also high on the blockchain technology and has begun implementing it in some government departments. The government of Canada also wants to ensure that Anti Money Laundering laws are strict when it comes to cryptocurrencies.
Legality of Bitcoins in Australia
The legal status of Bitcoins in the land down under is still quite confusing. While there have been millions of people who have been investing in Bitcoins, the governments are still quite speculative. The banks recently raised a complaint that money is flowing out of the traditional systems of investment to the cryptocurrency markets. However, despite all this - cryptocurrencies remain popular in Australia.
In an interesting development, Australia’s Brisbane Airport became the first ever airport to fully support cryptocurrencies - for booking flights and even in restaurants and cafes.
Legal Status of Bitcoin in Europe
Different countries of Europe have a different stance when it comes to legality of Bitcoins in their nation. Let us take a look at some European nations and how they treat Bitcoins:
Belgium: Belgium maintains a neutral stance when it comes to Bitcoins. However, the country has declared that Bitcoins will be exempted from Value Added Tax (VAT).
UK: The United Kingdom has been quite positive towards cryptocurrencies. The Bank of England soon plans to release a cryptocurrency which will be backed and regulated by the government. The UK Financial Conduct Authority is working towards implementing cryptocurrency payments on a larger scale.
France: France has set a number of regulations on cryptocurrency exchanges. The country isn’t as warm and welcoming to cryptocurrencies as many other nations in Europe. It requires a strict KYC process for all domestic exchanges and users who sign up for them need to provide personal information.
The Netherlands: The legal status of Bitcoins in The Netherlands is quite similar to that of Canada. Bitcoins transactions are treated as a barter transaction in the country. In The Netherlands, there are no specific rules of licensing and compliance that apply to Bitcoins.
Italy: The government of Italy is concerned that Bitcoins might be used to finance some illegal activities in the country and plans to introduce stricter regulations in the near future. As of now there are no laws complying to Bitcoin in the nation.
Switzerland: Bitcoins are considered to be a ‘foreign currency’ in Switzerland. Certain laws of forex are likely to apply to Bitcoins. The country is moving towards stricter laws which will help regulate cryptocurrencies in the nation.
Legality in other regionsa
Legality of Bitcoins in Singapore
Singapore is one of the most popular South-East Asian nations when it comes to Bitcoin users. The country has shown a very open approach towards the cryptocurrencies. In Singapore, all cryptocurrency exchanges need to get their users verified and collect personal information from them similar to the French laws.
However, Singapore is known for being quite progressive as there are many places in Singapore which accept cryptocurrency payments. Moreover, there are many Bitcoin ATMs all over the country! The Monetary Authority of Singapore is working towards tax laws to bring cryptocurrencies under the tax scanner.
Legal Status of Bitcoins in India
One of the biggest nations when it comes to cryptocurrency trade, India accounts for almost one in every ten Bitcoin transactions in the world. As of this writing there are no specific laws regarding cryptocurrencies in India and it is largely an unregulated market. However, the Indian government has clarified that Bitcoin is not a legal tender in India. The top financial executives from the nation have been meeting to discuss regulations and Bitcoins is likely to get a quasi-legal status soon.
Bitcoin’s Legality in Japan
Japan is perhaps the most enthusiastic nation when it comes to the legality of Bitcoin. The country has shown an active interest in the cryptocurrency. Japan is home to a number of Bitcoin exchanges and while there are some regulations - the country isn’t very strict. It is likely that Bitcoins will get some sort of a legal status in Japan soon.
Legality in other parts of the world
There are some countries such as China and of late, even South Korea which are reacting with hostility towards cryptocurrencies. There are some like Canada and Japan which have welcomed it with open arms. Others are planning to start their own cryptocurrency. Venezuela already has their petrol backed currency, the Petro Coin. Russia too, is planning on releasing a digital Ruble while Israel is also working on a digital Shekel. With time, we expect the number of countries where Bitcoin is legal to rise!