Is Bitcoin legal

Is Bitcoin legal?

The question of Bitcoin’s legality has many answers, depending on where you are, who you ask and when. The laws are different everywhere. Some countries consider digital currencies to fall under existing laws – others believe they require new laws, some of which have been written but most of which haven’t. The picture is complicated.

First, because Bitcoin and other cryptocurrencies are so new, regulators and lawmakers have taken a while to catch up. Some have responded with a “wait and see” approach, while others have been more hostile. Regulations and laws are still very new and subject to change, so use the information below as a guide but understand that it may have changed.

Second, there are multiple issues to consider when determining whether a virtual currency is ‘legal’. First there’s the notion of ‘legal tender’. If a currency is legal tender in a given territory then retailers, banks and other institutions in that territory are obliged to accept it. So far, only Japan considers Bitcoin to be legal tender.

If something is not legal tender, that doesn’t mean that retailers and financial institutions are barred from accepting it. They can choose to do so at their discretion. This is the situation with gift vouchers, for example, which are not legal tender but can still be exchanged for goods and services at participating institutions. In those circumstances, there are fewer legal protections for buyers and sellers should something go wrong with the transaction.

Few places in the world have ruled Bitcoin and other cryptocurrencies to be entirely illegal. However, in those that have, cryptocurrencies are not legal tender and accepting them is punishable by law. That’s why it is advisable to check the rules in any country that you intend to do business with. Zimbabwe has said that Bitcoin is “not actually legal” but has left open the possibility that it might be once regulations have been drawn up. We have listed Zimbabwe as illegal, below.

Of course, using a cryptocurrency to do something illegal, such as buying prohibited drugs, would be considered illegal regardless of the status of digital currencies in the country in question.

For countries listed below as ‘legal’, we have taken those countries that have specifically said that Bitcoin and other cryptocurrencies are legal, or that they are ‘not illegal’. We have also assumed that if a country issues a statement about cryptocurrency and does not mention that they are illegal, then they are legal. We have taken the view that the illegality of cryptocurrency is significant enough that it would be mentioned. This can’t be guaranteed of course; so once again it is advisable to check before doing business.

If the cryptocurrency itself is considered legal then we have listed the country as ‘legal’ below. However, some countries have issued statements about Bitcoin and other cryptocurrencies and, while not ruling the currencies illegal, have placed some constraints on their use or on the activities of cryptocurrency-related businesses.

We have listed these countries as ‘legal, with caveats’. This includes countries that have said they plan to make cryptocurrencies illegal but have not yet done so; countries that consider it legal to hold cryptocurrencies but place restrictions on things such as trading or exchanging them, and countries where the central bank has placed limits on what financial institutions are allowed to do with cryptocurrencies.

Some countries consider cryptocurrency and cryptocurrency businesses as effectively the same thing, dealt with under the same laws and regulations, but most countries deal with them separately.

Almost every country that has issued any kind of statement on cryptocurrencies – whether from the government, the central bank or a financial regulator – has warned that they are extremely volatile investments and urged people to approach them cautiously. A handful are more positive and actively encourage experiments with cryptocurrency, but it is more common for countries to be sceptical.

We have also included two international bodies, the European Union and the G20, both of which have made statements about cryptocurrency regulation and raised the possibility of acting as a group. You can find the list of members of these organisations online.

There are many countries that are not listed here. This is most likely to be because we could not find any evidence of any official position one way or the other. That doesn’t mean that Bitcoin and cryptocurrencies are legal because the situation will depend on how the country defines them, and whether that definition falls under existing laws and regulations. If a country considers Bitcoin to be a commodity, for example, and has very strict commodity trading laws, then the legal position is likely to be ‘legal, with caveats’ or even ‘illegal’.

International bodies
European Union: The European Central Bank has called for tighter controls on the movement of digital currency, though it does not think cryptocurrencies themselves should be regulated yet. The European Parliament voted in April 2018 for measures to prevent money laundering and the financing of terrorism using cryptocurrency

G20: The G20 group of the world’s twenty largest economies is committed to drafting recommendations towards regulating cryptocurrency

EUROPE
Illegal
Macedonia

Legal
Andorra, Belarus, Belgium, Bosnia & Herzegovina, Croatia, Cyprus, Denmark, France, Georgia, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Macedonia, Malta, Monaco, Netherlands, Portugal, Romania, Serbia, Slovenia, Sweden and Ukraine.

Legal, with caveats
Austria: Legal, earnings subject to tax law
Bulgaria: Legal, but taxable
Czech Republic: Legal, classed as an ‘intangible asset’
Estonia: ‘Know Your Customer’ rules state that traders must identify buyers when they establish a relationship or when a buyer purchases €1,000 of coins in a month.
Finland: Legal, but taxable
Germany: Legal, classed as ‘private money’ and subject to tax.
Norway: Legal, but taxable
Poland: Legal, however the National Bank of Poland and the Financial Supervision Authority have both warned against buying, trading or investing in virtual currencies, and emphasised that they have no legal status as a currency.
Russia: Legal, but exchanges are banned and the deputy finance minister has said that accepting payments in Bitcoin is “probably illegal.”
Slovakia: Legal, but mining is taxed as are sales carried out in Bitcoin
Spain: Legal, subject to same laws as barter transactions
Switzerland: Legal, Switzerland has been very positive about cryptocurrencies in general. The town of Zug accepts Bitcoin as payment for fees and Swiss Federal Railways sells Bitcoin at its ticket machines.
United Kingdom: Legal, classed as ‘private money’ and subject to tax.

THE AMERICAS
Illegal
Bolivia and Ecuador.

Legal
Antigua & Barbuda, Argentina, Barbados, Chile, Colombia, Costa Rica, Cuba, Dominican Republic, Jamaica, Nicaragua, Panama, Paraguay, Peru, Trinidad & Tobago and United States.

Legal, with caveats
Brazil: Legal, but publicly discouraged by the central bank
Canada: Legal, but subject to tax laws. Some banks have banned their customers from using their credit or debit cards to purchase cryptocurrencies.
Mexico: Legal, but regulated as a ‘virtual asset’ and banks are not allowed to deal in virtual currencies.

AFRICA
Illegal
Algeria and Zimbabwe.

Legal
Congo, Gabon, Kenya, Mauritius and Tunisia.

Legal, but with caveats
Egypt: Legal, but the Grand Mufti of Egypt has declared cryptocurrency trading to be illegal under Islamic law.
Morocco: Legal, but Bitcoin is considered a financial asset rather than a currency, and transactions may fall foul of existing laws.
Namibia: Legal, but cryptocurrency exchanges are banned and cryptocurrency cannot be accepted as payment.
Nigeria: Legal, but banks are not allowed to deal in cryptocurrencies
South Africa: Legal, but classified as an ‘intangible asset’.

ASIA
Illegal
Afghanistan, Azerbaijan, Bangladesh, Cambodia, Nepal, Qatar and Vietnam.

Legal
Hong Kong, Iraq, Japan, Kuwait, Lebanon, Malaysia, Maldives, Mongolia, Philippines, Saudi Arabia, Turkey and United Arab Emirates.

Legal, but with caveats
China: Legal, but the government has heavily policed trading, with some activities considered illegal and some exchanges forced to cease trading. The country is also targeting cryptocurrency mining.
India: Legal, but the central bank bans banks and other financial services businesses from dealing in cryptocurrencies.
Indonesia: Legal to trade and hold but illegal to use for payments.
Iran: Legal, but the central bank bans banks and other financial services businesses from dealing in cryptocurrencies. Cryptocurrency websites in the country are reportedly censored.
Israel: Legal, but subject to tax
Jordan: Legal, but the central bank bans banks and other financial services businesses from dealing in cryptocurrencies.
Kazakhstan: Legal, but the central bank has announced plans to ban cryptocurrency trading and mining.
Kyrgyzstan: Legal, but considered a ‘commodity’ and use as a currency is restricted.
Pakistan: Legal, but financial institutions are banned from working with cryptocurrency firms.
Singapore: Legal, but treated as barter exchange and subject to tax laws
South Korea: Legal, but trade in futures contracts and derivatives linked to cryptocurrencies is banned.
Taiwan: Legal, but Bitcoin ATMs are banned, though Bitcoins can be purchased at convenience stores.
Thailand: Legal, but the central bank has banned financial institutions from investing or trading in cryptocurrencies.
Vietnam: Legal to trade and hold, but illegal to use for payments.

AUSTRALASIA
Illegal
Vanuatu

Legal, but with caveats
Australia: Legal, but cryptocurrency exchanges must register with the financial intelligence agency.
New Zealand: Legal, so long as no physical notes or coins are issued.

Coinschedule
This post is provided for informational purposes only. None of the information presented here should be considered investment advice. Everyone should always do their own research and due diligence before sending funds to any third party.