bitcoin law

Legal Status of Bitcoin

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As more and more people began to be interested in the topic of Bitcoins, they began to trade as a financial asset. It was at this moment that Bitcoin became a phenomenon and is already in the top of search queries in Google around the world. The perception of Bitcoin by the authorities varies greatly – from enthusiastic acceptance to skepticism and ignoring. A question is born is Bitcoin legal? Consider the issue of the legal status of Bitcoin in the world in more detail.

Bitcoin regulations

Cryptocurrencies are a relatively new payment tool that appeared on the world market only in 2009. Accordingly, the legal and legal regulation of such an instrument in the legislation of most countries of the world simply did not exist, which gave rise to many legal conflicts and speculations. To date, only some states have fully established legislative norms regulating the circulation of cryptocurrencies

Why it is so complicated

The principal difference, important for the subsequent determination of the legal status of Bitcoin and other cryptocurrencies, is the presence of certain guarantees of transactions that allow trading operations without the services of intermediaries. All transactions are publicly available and can be tracked by third parties, which eliminates the possibility of counterfeiting such means of payment and eliminates the need to involve the guarantor as a third party to the transaction.

 In general, today the majority of states determine the legal status of only specific cryptocurrency systems, primarily Bitcoin, as the most common blockchain system. In particular, the use of bitcoins as full-value money in Japan is fully regulated, in part – in Thailand, Singapore, the USA, China, and Switzerland.

bitcoin law

Legality of mining

In most countries, the cryptocurrency is not regulated in any way, and, accordingly, there are no articles of laws in accordance with which miners could be brought to justice. Nevertheless, the majority of both large and small farms operate underground. And this applies both directly to the process of mining tokens, and the production of equipment for it.

Recently, the authorities of different states come to understand that this process should not only not be prohibited but be regulated by law so that the owners of crypto farms act in the legal field without fear of being behind bars. Especially since the mining of cryptocurrency, as well as the production of equipment for it, is a promising direction and will be actively developed in the coming years.

Bitcoin and taxes

While laws for taxing Bitcoin and income from it might differ from nation to nation some are considering Bitcoin and other cryptocurrency taxable classifying them similar to bonds and stocks.

Countries where Bitcoin is prohibited

Only a few countries completely banned Bitcoin. A notable example is Iceland, where the world’s largest Bitcoin mining farms are located, but at the same time, residents cannot buy Bitcoins (only mine). This is done to try to prevent the withdrawal of capital from Iceland. The remaining five countries: Bolivia, Ecuador, Bangladesh, Kyrgyzstan, Vietnam, Algeria, Bangladesh, Bolivia, Cambodia, China, Colombia, Ecuador, Egypt, Indonesia, Iran, Morocco, Nepal, Pakistan, Saudi Arabia, and Taiwan.

bitcoin law

Countries where Bitcoin is legal

Argentina, Australia, Austria, Belarus, Belgium, Bosnia and Herzegovina, Brazil, Bulgaria, Chile, Costa Rica, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France ,Germany, Greece, Hong Kong, Hungary, Iceland, Ireland, Israel, Italy, Jamaica, Japan, Kyrgyzstan, Lebanon, Lithuania, Luxembourg, Macedonia, Malaysia, Malta, Mexico, Namibia, Netherlands, New Zealand, Nicaragua, Nigeria, Norway, Philippines, Poland, Portugal, Romania, Russia, Singapore, Slovakia, Slovenia, South Africa, South Korea, Spain, Sweden, Switzerland, Trinidad and, Tobago, Turkey, Ukraine, United Kingdom, United States of America, Uzbekistan, Venezuela, and Zimbabwe

Countries where Bitcoin is limited

These are countries that have a legal basis for Bitcoin but do not perceive it as a real currency, as Japan does. Most countries of the world fall into this category. For example, in the US, the Commodity Futures Trading Commission classifies Bitcoin as a commodity, while the US Treasury Department views it as a money-handling business (money transfers and conversion to other currencies). Other countries limiting usage of Bitcoin is Canada, India, Jordan, Thailand, United Arab Emirates, and Vietnam.

I’m a freelance writer and full-time curious person. My main interests are philosophy, politics, art, culture, science, and how they’re all interlinked. When I’m not writing, I’m fronting a band, producing records, and making videos. I’m also currently working on launching a YouTube channel that will focus on culture and politics. I think blockchain technology is fascinating because of the huge potential it has to revolutionise not only the financial sector, but society as a whole.