Countries Where Bitcoins Are Legal
In Estonia, the use of bitcoins is not regulated or controlled by the government. [3]: Estonia The National Bank of Slovakia (SNB) has stated[141] that Bitcoin does not have the legal characteristics of a currency and therefore cannot be considered a currency. [Note 1] European legislation, including Slovak legislation, does not define activities related to virtual currency. These activities are not regulated and supervised by the National Bank of Slovakia or the European Central Bank. At the same time, LENB points out that legal or natural persons in the Slovak Republic are not allowed to issue banknotes or other coins. The illegal production of banknotes and coins and their placing on the market are punishable by law. In this regard, NBS points out that virtual currencies do not have a physical counterparty in the form of legal tender and that participation in such a system (virtual currency) is at your own risk. The exchange or purchase of virtual currencies represents investors` commercial risk and investors` money is not protected. There is no legal right to compensation for losses caused by such exchanges or purchases. In fact, there are many countries with different regulations when it comes to cryptocurrency. Some of them even highlight Bitcoin and allow it to be used as currency, pay taxes, buy goods, or exchange it as a commodity.
On another note, Bitcoin regulations are largely dictated by national regulators. Due to the decentralized nature of cryptocurrency, banning btc in one national jurisdiction does not directly affect its legal status in another jurisdiction. But when a country like the United States cracks down on cryptocurrencies through regulations, the market reacts. The resulting price action can affect all countries that use Bitcoin as legal tender or as reserve currency. Since April 2017, cryptocurrency exchange companies operating in Japan are regulated by the Payment Services Act. Cryptocurrency exchange companies must be registered, keep records, take security measures, and take steps to protect customers. The Cryptocurrency Transactions Act must comply with the Money Laundering Act. and measures to protect investors from users. The Payment Services Act defines “cryptocurrency” as real estate value. The law also states that cryptocurrency is limited to property values stored electronically on electronic devices, not legal tender. [105] [106] Currently, there are other states that seem willing to do something similar, although a state with a national currency may be much more reluctant to make Bitcoin legal. On September 2, 2018, a decree came into effect that legalizes crypto trading – which also makes it tax-exempt – and mining in the country, making Uzbekistan a crypto-friendly state.
[61] This article explains where Bitcoin and cryptocurrencies were found in Decision 034/2014 of the Finnish Central Tax Board (CBT) according to which commissions levied on purchases of Bitcoin via a foreign exchange market are banking services under the EU VAT Directive and are therefore exempt from VAT. Indeed, the court classified bitcoins as payment instruments – while most countries treat their use as an unregulated method of exchanging goods or even as a crime. [171] [172] In Panama, a neighboring country of El Salvador, there are also legislative initiatives to make Bitcoin legal. Panama could very well be the next country to legalize Bitcoin. Crypto is not legal tender in Georgia, but there are currently no regulations from the National Bank of Georgia that prevent it from being used in the form of barter. [152] In any case, more and more governments are opting for digital innovation and playing a role in the industry. At the same time, jurisdictions that oppose the emerging industry run the risk of being left behind. Ironically, these countries are already among the poorest countries in the world, and widespread raids on Bitcoin and cryptocurrency do not seem to produce favorable results to improve the situation. Quite the contrary; The adoption of cryptocurrency companies with favorable regulations offers a great opportunity to bring innovation, capital and tax revenue, and improve the standard of living of the entire population.
“The government does not recognize cryptocurrency as legal tender or coin and will take all steps to eliminate the use of these crypto assets in financing illegitimate activities or as part of the payment system,” Jaitley said. [79] Ukraine is the fifth country in as many months to establish ground rules for digital currencies after El Salvador`s decision to introduce Bitcoin as legal tender. However, there are many other countries where Bitcoin, although not legal tender, is generally accepted as a means of payment, but not by force and not by everyone. Another consideration for countries is the extent of financial inclusion in their economies. Although the customer journey around cryptocurrencies is by no means user-friendly, it must be said that hyperlocal experiences aimed at creating an ecosystem on Bitcoin have had some success in countries like El Salvador. Since remittances make a huge contribution to the economy, digital currencies can not only contribute to financial inclusion, but also achieve cost savings in transfer fees. The Central Bank of Ireland was cited in Dáil Éireann in December 2013 as stating that it did not regulate Bitcoin and that Bitcoin was not legal tender in the European Union. [3]: Ireland It should also be noted that regimes that adopt Bitcoin as their legal tender have claimed to bring financial inclusion to the population. Nevertheless, financial inclusion often has to be preceded by the penetration of mobile devices and the Internet. Without digital infrastructure, a digital currency alone will not be able to solve the problem of financial inclusion. It is forbidden for miners and all foreigners to exchange cryptocurrencies.
Adult South Koreans can trade on registered exchanges with real name accounts at a bank where the exchange also has an account. The bank and exchange are responsible for verifying the identity of the customer and enforcing other anti-money laundering regulations. [107] [108] Bitcoin and cryptocurrencies are generally welcome in most parts of the world. Nevertheless, some countries have effectively banned or used them. Whether the bans were imposed because of the decentralized nature of bitcoins, the threat to their current financial system, or simply because the right regulations have not yet been approved, at least nine countries have decided to do so. These are: The use of Bitcoin in Poland is currently not regulated by a legal act. [3]: Poland As of August 2018[update], the US FinCEN had received more than 1,500 SAR per month with cryptocurrencies. [36] Seventeen other countries have similar anti-money laundering requirements. [14] Nevertheless, central banks are embarking on digital currencies. There are countries with more fundamental problems that only a digital version of a fiat currency may not be able to solve.
For example, countries like Argentina and Venezuela have suffered from hyperinflation for years and can settle for a form of money that has value far beyond their own economies. There are also countries like El Salvador, Panama, Guatemala and Honduras where a significant percentage of GDP is provided by remittances. This paves the way for a form of exchange of value that is not limited by national borders. For example, 24.07% of El Salvador`s GDP in 2020 came from remittances. Recently, places where Bitcoin can often be used as currency are also multiplying in Switzerland, starting with the city of Lugano. In January 2022, coinciding with an energy crisis, Kosovo banned all cryptocurrency mining. According to BBC News, cryptocurrency mining is “particularly popular in the northern regions of Kosovo, where ethnic Serbs do not recognize state independence and refuse to pay electricity bills.” [154] Although not officially banned, the Bank of Tanzania advises against using cryptocurrency, pointing out that Tanzanian shilling is the only acceptable legal means of payment. [20] [21] In North Macedonia, there is no specific legislation on bitcoins or cryptocurrencies. The second country to adopt Bitcoin as legal tender is the Central African Republic (CAR). The Central African Republic is rich in natural resources such as gold and diamonds and has an economy of $2.3 billion. Nevertheless, financial inclusion is quite low and they depend on remittances. In addition to adopting Bitcoin, the country has also announced that 20% of its treasury will hold Sango Coin (SANGO), a digital currency that will reflect the health of the country`s natural resources. There are liquidity and regulatory risks around the crypto market that a country assumes when it uses it as legal tender.
With the crypto market highly correlated with U.S. stock markets, the Federal Reserve`s policy changes will have an impact on crypto prices. The EU identifies cryptocurrencies as aces of cryptography, so it is legal to trade and use Bitcoin. However, monetary regulation within the EU has announced that not all activities involving crypto assets are under its control. The Financial Services Commission of Mauritius considers cryptocurrencies to be a digital asset under the Financial Services Act 2007, and although it warns investors that they are not protected by statutory remuneration agreements, they are legal. [23] In the bill, bitcoins are classified as property and are not considered legal tender. The exchange of cryptocurrency for rubles and foreign currencies is allowed, but only through licensed operators. The bill also includes a definition of a smart contract. [Citation needed] While Bitcoin is welcome in many parts of the world, several countries are wary of its volatility and decentralized nature.
Some also perceive it as a threat to their current monetary systems, while they fear it will be used to support illegal activities such as drug trafficking, money laundering and terrorism.
