Bitcoin and Other Virtual Currencies: Are They Legal?
Virtual currencies are quickly gaining momentum around the world. This is often the sake of investment, but other forms of spending and transfers in Bitcoin are also becoming more common.
Given the increasing knowledge and popularity of Bitcoin, as well as other virtual currencies, some people are starting to question whether or not Bitcoin is actually legal to use as a currency. There isn’t one easy answer to this question, as many countries have their own unique policies about Bitcoin.
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Legislation On Bitcoin
Few countries have any legal support of specific virtual currencies. In most of the world, legislators are not giving much attention to Bitcoin and are treating it more like a person’s property or possession, rather than a real currency.
However, a few countries around the world (namely Germany, Singapore, Canada, and Finland) have issued guidance about how Bitcoins and virtual currencies should be dealt with for tax purposes. This is an important step towards recognizing the legitimacy of virtual currencies.
Money laundering is a huge issue that numerous countries fear when it comes to the use of Bitcoin. This is why virtual currencies are restricted or illegal in some parts of the world. While the legal systems of many countries are actively trying to put laws in place, which will limit money laundering, a handful have chosen to simply make Bitcoin illegal.
Is Bitcoin Illegal Anywhere?
The largest countries that have made the use of Bitcoin illegal include Russia, Indonesia, Bangladesh, Vietnam, Thailand, Bolivia and Iceland. All of these countries, to name a few, around the world have outlawed, or are in the process of outlawing, Bitcoins.
Such usage of Bitcoins may be illegal in Thailand, but companies are allowed to obtain a certificate from the government which allows them to mine Bitcoins for profit. This is seen more as a business activity than a personal financial activity, which makes it more acceptable.
Which Countries Allow Bitcoin Usage?
Most countries around the world, especially in Europe, the Americas, and Eastern Asia, allow the use of Bitcoins. While many of these nations actively allow Bitcoins to be used by individuals and businesses, some only allow a restricted usage or have no official opinion on virtual currencies at all.
An example of a country with a restricted usage is China. Individuals are allowed to use
Bitcoins as they please, but no financial institutions are allowed to deal in Bitcoin in any way.
Restrictions are also placed on Bitcoin usage in India and Jordan. In Taiwan, it is not allowed to have or use Bitcoin ATMs.
Allowing the use of Bitcoin is not the same thing as allowing Bitcoin to be used for illegal purposes. If, at any point, Bitcoins are used in an illegal transaction, such as money laundering or fraud, the countries that allow usage of the virtual currency can still press charges against you.
In any country without an official opinion of virtual currency, it is assumed that you can use Bitcoin without any trouble. However, the risks are greater as it’s difficult to predict whether Bitcoins will ever be considered illegal or not.
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