Topic: Bitcoin being deemed an Illegal tender- What's the potential aftermath and uses? - page 2. (Read 374 times)

Why do people care about the government's attitude to bitcoin? You probably forgot the main purpose of the appearance of bitcoins? It was supposed to be an independent currency that nobody regulated and created to be used between people. Why do you need government approval? You buy bitcoins for your honestly earned money. Why do you have to pay extra taxes? People are accustomed to obey the government and this is the main reason why bitcoin cannot succeed.

Bitcoin can still be sold in international exchanges (or domestic exchanges), even if it is not recognized as legal tender. There may be rules on foreign exchange transfers (but this is usually to prevent foreign exchange from leaving the country, not the other way around). You do not have to physically leave the country and sell your bitcoins. If you are not trying to evade taxes, there is no harm in selling bitcoins at an international exchange and receiving the money in fiat currency in your bank account.

In my country, bitcoin is considered to have no legal tender and although this would be different if it were to be illegal tender but how it is treated would be nearly the same. It would be difficult to adopt the cryptocurrency as a payment system if this were the case. This would make it hard to "no longer rely on banks or having our own bank". Bitcoin may still be owned if it were not declared illegal to hold crypto but then no transactions can be made with the use of it.

Your point seems apt and I used to believe similarly about being able to send those cryptocurrencies outside the country. I had a good thought about being able to do this, but then had realized that it had several restrictions, limitations and barries of its own. People who can afford to travel abroad would be able to encash their Bitcoins offshore and bring a bit back to their homecountry, but this constitutes a small percentage of the people. Apart from that, being able to send the Bitcoins offshore to procure goods will levy several customs duties (Atleast where I live the percentage of duty for many electronic goods and medium-high value goods are usually taxable sometimes upto 40% and for some items even more) as compared to the items procured within the country if Bitcoins were a legal tender.

What mainly concerns me here is Bitcoin being a legal tender certainly eases a lot of things and boosts adoption. There are some scenarios where a country's currency value is so poor that people resort to using Bitcoins in the grey / black market (for example in the case of Venezuela) and I fear of this scenario only if holding cryptocurrencies become illegal (Although it'd be a nightmare for the authorities to track if kept well hidden until time to exchange).

The mainy issue is making cryptocurrencies an illegal tender limits the ways in which we can use it within the country and finding avenues abroad isn't as easy and may eventually be a playground for investors to just trade them in an exchange for the value that it has because of the offshore benefits cryptocurrencies provide to people living in other countries.

Very well said specially on the bolded part on where as long the government doesnt impose such restrictions or laws about cryptocurrency holding or transactions then falling of the price wont really be suited or cant really be presumed.We do know on how accessible on crypto would be in terms of transactions, even it would be prohibited but stopping it would be really impossible.

Definition of Legal Tender - Legal tender can be used to satisfy debts. For example,  if I am bound by contract to pay a certain person a given amount, I can do so using fiat notes ("Legal tender") issued by the government.

If a certain commodity / currency is not deemed to be legal tender, it does not preclude two private parties from entering into an agreement to exchange the commodity / currency for goods or services. This would be considered as a barter agreement by the government, rather than a 'sale'. Of course, this assumes that the government has not specifically banned barter transactions.

If a country bans the use of cryptocurrencies in transactions, but does not make holding them illegal, I don't think the price of cryptocurrencies will fall. This is because technically value could be realized by sending those cryptocurrencies outside the country. If holding them is illegal, then of course the only value which can be realized is in the grey market, and the price will naturally plummet.

Regulations for Bitcoin provide some form of relief to cryptocurrency users within a particular jurisdiction or a nation when it has been decided that use of cryptocurrencies, although monitored and the exchanges controlled, can continue to happen among parties that are interested in it. This infact allows stores and people to accept them without being in constant fears of any legal pressures, but when a country deems Bitcoin and cryptocurrencies in general as an illegal tender, it makes me ponder on what possible uses could the dreaded investors and users derive out of their Bitcoins? Would they continue to find value in exchanging cryptocurrencies (its non intended purpose), like trading it similar to a stock / derivative or like currencies being traded in a forex exchange to seek profitable margins?

I'm sure most of you might have a hint of the country that I'm talking about and which has, atleast temporarily, deemed using cryptocurrencies as a medium of exchange / legal tender, illegal. In India, the Minister of Corporate Affairs had read out these lines on public television when he was asked about the 'legal status' of Bitcoins and cryptocurrencies in general. I also remember readinghere that the Ministry of Finance had outrightly stated cryptocurrencies as ponzi scheems and that they are neither currencies nor coins.

Now, it's pretty much possible that many other nations could follow suit and take a similar approach towards Bitcoins. My real concern and the thing that leads to me asking my question is, if they're no longer a legal tender, how would Bitcoin and "cryptocurrencies" in general be used for their original purpose? (considering that loopholes aren't being used, as I'm aware that there's one being utilized at the moment, but could be outlawed soon perhaps?) Most investors would hence prefer to only trade them on an exchange for any value that they find out of it (the value here being the price).

What do you think are its potential aftermath and uses if your country is on the verge to deeming it as an illegal tender? Would you be concerned about no longer being able to use Bitcoins for its intended purpose, i.e; To no longer rely on your Banks and to be your own bank?