Legal Status of Bitcoin in Different Countries in 2020
The digital currency network comes into existence in 2009. Before bitcoin has invented, many attempts have made to produce cryptocurrencies but every time it was failed. When bitcoin (first cryptocurrency) was developed, it solved all the previous issues related to cryptocurrencies.
Till now more than a thousand cryptocurrencies were developed and the number is continuing. However, there are many countries that do not allow the use of cryptocurrencies for various reasons.
The first reason is being decentralization that does not allow any third-party involvement in the transaction processes. Secondly, there are many fraud cases found in relation to cryptocurrency in the past. So here you will get to know the legality of cryptocurrencies in different currencies.
The legality of Bitcoin by Country
Most countries are still not sure about legalizing the use of bitcoin or any other cryptocurrencies. In this article, you will find the legal status of cryptocurrency in various countries.
Countries in Which Bitcoin Usage is Legal
There are many countries which allow bitcoin as a mode of transaction but with some restriction. Let us know them in detail.
- The United States: In the United States, the use of bitcoin has a positive outlook. However, some government agencies have put many restrictions on the usage of bitcoin to minimize illegal activities. Some of the big corporations in the USA accept payments through bitcoin. As the derivatives market has allowed trading through bitcoin, it shows more legitimacy of the cryptocurrency. Bitcoin is considered as a money services business instead of currency in the USA.
- Canada: The Canada Revenue Agency consider bitcoin as a commodity. Though it is legal to use bitcoin in Canada, there are regulations to control the illegal usage of Bitcoin. The income though bitcoin is considered as business income in this country.
- Australia: Like Canada, bitcoin is not considered as any currency in Australia. According to the Australian Taxation Office, bitcoin is an asset class.
- The European Union: Bitcoin is accepted as legal in the European Union. But different counties in the EU have different taxation and regulations over the usage. Some countries take it as an investment option and pose tax law. Whereas some countries do not pose any tax on the earnings from bitcoin.
Countries in Which Cryptocurrency Usage is Illegal
Even though cryptocurrencies offer faster transactions and cost-effective, many countries have banned the usage. Because they are volatile in nature, deregulated, and the potential risk of money laundering. Here are the countries that do not allow partially or fully the usage of any types of cryptocurrencies.
- China: Bitcoin usage in China is banned. No banks, financial institutions allow the usage of bitcoin or any other types of cryptocurrencies. The government stopped the mining of bitcoin in China
- Russia: It is illegal to use bitcoin for any type of transaction or payment in Russia. There is no regulation for the usage of bitcoin.
- Vietnam: The Vietnam government as well as banks banned the usage of bitcoin and investing is also prohibited.
- Bolivia: Bolivia prohibited the use of bitcoin and other digital currencies.
- Columbia: Investing or using bitcoin is not allowed in Columbia.
- Ecuador: In Ecuador Assembly, the majority vote depicts to ban bitcoin.
The Bottom Line
Although bitcoin was invented ten years ago, there are no certain guidelines about its usage. Many reasons such as the regulation, money laundering, cyber-attacks, scams made its usage in many countries as illegal.
However, most countries are looking for different ways to regulate and accept cryptocurrencies. Overall, the usage of bitcoin is increasing and expected to disrupt the traditional currencies in the future.
If you want to invest in bitcoin then check your countries legal status and you can use bitcoin era to invest in any type of cryptocurrencies.