Where Crypto Is Legal?

Why Crypto has Value?

by DailyCryptoInfo 381 Views

Where Crypto Is Legal?

Why Crypto has Value?

by DailyCryptoInfo 381 Views

Cryptocurrencies and especially Bitcoins are not issued, endorsed, or regulated by any central bank. Instead, they are created through a computer-generated process known as mining. In addition to being a cryptocurrency unrelated to any government, Bitcoin is a peer-to-peer payment system since it does not exist in a physical form. As such, it offers a convenient way to conduct cross-border transactions with no exchange rate fees. It also allows users to remain anonymous.

Where-crypto-is-legal


Consumers have greater ability to purchase goods and services with Bitcoin directly at online retailers, pull cash out of Bitcoin ATMs and use Bitcoin at some brick-and-mortar stores. The currency is being traded on exchanges, and virtual currency-related ventures and ICOs draw interest from across the investment spectrum. While Bitcoin appears at glance to be a well-established virtual currency system, there are still no uniform international laws that regulate Bitcoin. (For more see Stores Where You Can Buy Things With Bitcoins)

Countries that Say Yes to Crypto


Bitcoin can be used anonymously to conduct transactions between any account holders, anywhere and anytime across the globe, which makes it attractive to criminals and terror organizations. They may use Bitcoin to buy or sell illegal goods like drugs or weapons. Most countries have not clearly determined the legality of Bitcoin, preferring instead to take a wait-and-see approach. Some countries have indirectly assented to the legal use of Bitcoin by enacting some regulatory oversight. However, Bitcoin is never legally acceptable as a substitute for a country’s legal tender.
The United States
The United States has taken a generally positive stance toward Bitcoin, though several government agencies work to prevent or reduce Bitcoin use for illegal transactions. Prominent businesses like Dish Network (DISH), the Microsoft Store, sandwich retailer Subway and Overstock.com (OSTK) welcome payment in Bitcoin. The digital currency has also made its way to the U.S. derivatives markets, which speaks about its increasingly legitimate presence.
The U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN) has been issuing guidance on Bitcoin since 2013. The Treasury has defined Bitcoin not as currency, but as a money services business (MSB). This places it under the Bank Secrecy Act which requires exchanges and payment processors to adhere to certain responsibilities like reporting, registration, and record keeping. In addition, Bitcoin is categorized as property for taxation purposes by the Internal Revenue Service (IRS).
Canada
Like its southern neighbor the United States, Canada maintains a generally Bitcoin-friendly stance while also ensuring the cryptocurrency is not used for money laundering. Bitcoin is viewed as a commodity by the Canada Revenue Agency (CRA). This means that Bitcoin transactions are viewed as barter transactions, and the income generated is considered as business income. The taxation also depends whether the individual has a buying-selling business or is only concerned with investing.
Canada considers Bitcoin exchanges to be money service businesses. This brings them under the purview of the anti-money laundering (AML) laws. Bitcoin exchanges need to register with Financial Transactions and Reports Analysis Centre (FINTRAC), report any suspicious transactions, abide by the compliance plans, and even keep certain records. In addition, some major Canadian banks have banned the use of their credit or debit cards for Bitcoin transactions.
Australia
Australia considers Bitcoin a currency like any other and allows entities to trade, mine, or buy it.

The European Union

Though the European Union (EU) has followed developments in cryptocurrency, it has not issued any official decision on legality, acceptance or regulation. In the absence of central guidance, individual EU countries have developed their own Bitcoin stances.
In Finland, the Central Board of Taxes (CBT) has given Bitcoin a value-added tax exempt status by classifying it as a financial service. Bitcoin is treated as a commodity in Finland and not as a currency. The Federal Public Service Finance of Belgium has also made Bitcoin exempt from value added tax (VAT). In Cyprus, Bitcoin are not controlled or regulated either. The Financial Conduct Authority (FCA) in the United Kingdom (U.K.) has a pro-Bitcoin stance and wants the regulatory environment to be supportive of the digital currency. Bitcoin is under certain tax regulations in the U.K. The National Revenue Agency (NRA) of Bulgaria has also brought Bitcoin under its existing taw laws. Germany is open to Bitcoin; it is considered legal but taxed differently depending upon whether the authorities are dealing with exchanges, miners, enterprises or users.

Countries That Say No to Crypto

While Bitcoin is welcomed in many parts of the world, a few countries are wary because of its volatility, decentralized nature, perceived threat to current monetary systems and links to illicit activities like drug trafficking and money laundering. Some nations have outright banned the digital currency while others have tried to cut off any support from the banking and financial system essential for its trading and use.
China
Bitcoin is essentially banned in China. All banks and other financial institutions like payment processors are prohibited from transacting or dealing in Bitcoin. Cryptocurrency exchanges are banned. The government has cracked down on miners. (Related reading How Bitcoin Can Change The World)
Russia
Bitcoin is not regulated in Russia, though its use as payment for goods or services is illegal.
Vietnam
Vietnam’s government and its state bank maintain that Bitcoin is a not a legitimate payment method, though it is not regulated as an investment.
Bolivia, Columbia and Ecuador
El Banco Central de Bolivia has banned the use of Bitcoin and other cryptocurrencies. Columbia does not allow Bitcoin use or investment. Bitcoin and other cryptocurrencies were banned in Ecuador by a majority vote in the national assembly.

The Bottom Line

Although Cryptocurrencies and Bitcoin are now almost 10 years old, many countries still do not have explicit systems that restrict, regulate or ban the cryptocurrency.

Image source: Wikipedia.

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