Bitcoin, the first digital currency, was created in 2009 by Satoshi Nakamoto, whose identity is still unknown to this day. Bitcoin has a total quantity of 21 million and is mined, stored, and exchanged on the internet. Unlike other government-issued currencies, Bitcoin was designed to keep internet transaction costs as low as possible.
Because of bitcoin's nature and character, several nations have not embraced it because, for various reasons stated by their governments, they feel bitcoin may be used for various criminal actions by fraudsters to steal cash and by terrorists to obtain weapons, narcotics, and potentially dangerous substances.
The government does not have control over bitcoin since it is decentralized, therefore they do not want to embrace it like fiat money, which is controlled by the central bank and can still be used to destroy fiat currency through monetary policy.
Different countries are having their crypto regulations which are as follows;
- some countries bitcoin are completely ban
- Some countries use of bitcoin is legally restricted
- Some countries where Bitcoin are legal
- A country that Bitcoin is Official a Legal Tender
- Countries where Bitcoin are neither legal or ban.
If you are planning to buy bitcoin or any cryptocurrency in your county check it out if it is legal or illegal. Different countries have different crypto regulations. In some countries you having even cryptocurrency app can get you jailed so you have to be careful.
Countries Where Bitcoin is Official Legal Tender
- El Salvador. This is the only country that accept Bitcoin as legal tender. Before this action, it was recognized as the risk of the investor. Bitcoin investors should rejoice. Bitcoin as legal tender in any country is a huge event, one that deserves all the press it has been getting. El Salvador’s move could be a notable precedent in history if more and more countries begin to adopt Bitcoin in the future.
Countries where Bitcoin is legal.
- United States: Crypto is subject to tax laws in the United States. It is regulated if the sale of securities involves cryptocurrencies.
- Antigua and Barbuda. A bill was passed to protect exchanges and crypto users. Bitcoin could become legal tender soon in the country as you can use Bitcoin to pay for citizenship.
- Australia: Bitcoin and other cryptocurrencies have been legal in the country since 2017 and are subject to Capital Gains Tax.
- Barbados. Cryptocurrencies operate legally in Barbados. Barbados has its own digital currency, DCash, that has been active in 2021.
-Belgium: Cryptocurrencies are a ‘miscellaneous income tax’. Crypto is not considered legal tender, even though it is recognized as a possible ‘alternative to money’.
- Bulgaria: Licenses are not required to engage in crypto businesses and they are treated as income from sale of financial assets.
- Cayman Islands: New laws have been passed regulating cryptocurrencies. They have favorable tax laws for businesses, including cryptocurrency businesses.
- Chile: Cryptocurrencies are under the country’s money policies. There are protections for cryptocurrency exchanges in Chile.
- Croatia: Capital gains tax is only 10 %, and if you have held the funds for more than 2 years and traded with them, you are exempt from paying taxes
- Dominica: Planning to test out a cryptocurrency, DCash, crypto outlook is positive in the country. There was a project to hand out Bitcoin to the population but had been canceled.
- Estonia: Crypto is considered virtual currency and have digital value as a payment method, although it is not considered legal tender.
- Finland: Crypto is legal and regarded as virtual currency. The Financial Supervisory Authority is the authority on virtual currencies.
- Germany: Crypto assets are allowed to be bought, sold and held as long as they are from a licensed institution.
- Indonesia: Cryptocurrencies have been legal in Indonesia since 2019. It is regarded as a commodity when trading and not as a payment method.
- Italy: Regarded as a virtual currency, cryptocurrencies are subject to corporate and personal income tax.
- Ireland: Crypto is regarded as virtual currency and is taxed differently based on several scenarios.
- Japan: Crypto assets are under the ‘miscellaneous income’ category.
- Lithuania: Lithuania became one of the first countries to have a framework regarding cryptocurrencies and taxation, with earnings up to 2500 euro considered tax free.
- Malta: Malta is known for being the home to some of the biggest cryptocurrency exchanges like Binance and OKEx because of their open stance when it comes to crypto.
- Mauritius: Their regulations are under the category of Digital Asset.
- Marshall Islands: The SOV, or sovereign, is the legal currency of the Marshall Islands and it’s powered by blockchain.
- New Zealand: Cryptocurrencies are compared to gold and subject to taxes.
- Norway: Cryptocurrencies are considered assets and taxed.
- Philippines: Cryptocurrencies are in the security and investment contract categories and are subject to regulations by the SEC. Any financial services that are related to cryptocurrencies, like exchanges, are subject to the guidelines of the Philippines Central Bank.
- Serbia: Crypto is regarded as a digital asset for taxes. Crypto services need a license.
- South Korea: Crypto is legal and subject to anti-money laundering laws while being closely regulated by the government. Financial institutions are required to report cryptocurrency transactions.
- Sweden: Trade in Bitcoin is regarded as a financial service. Gains are taxed as business income.
- Switzerland: As early as 2017, crypto was being accepted as payment by the Commercial Register Office. Institutions need licenses in order to operate cryptocurrencies. There are extensive regulations implemented with a very positive outlook on crypto as a whole.
- Ukraine: Crypto is classified as property in the country. It is the growing destination to several crypto businesses.
- United Kingdom: Exchanges need to fit certain FCA requirements. Bitcoin is ‘private money.’
- United Arab Emirates: Considered a crypto-friendly country, UAE has its own Emirates Blockchain Strategy 2021, to move a majority of their transactions to blockchain and becoming a government powered by blockchain.
- Uzbekistan: Crypto is now legal in the country. Income gained from cryptocurrencies is not taxed and exchanges need specific requirements and licensing to be in operation.
- Venezuela: Having created its own petroleum-backed cryptocurrency in 2017, Venezuela seemed like a prime candidate for widespread crypto adoption. It was declared illegal in 2018 and efforts to make it legal again came about in January 2020. Mining, which had been illegal and those who did it were charged, have had their charges dismissed. Cryptocurrency activities are now legal in Venezuela.
Countries where Bitcoin is neither legal nor illegal
- Nigeria: In Nigeria banks and other financial agencies are not allowed to deal with cryptocurrency but bitcoin have not been targed legal or illegal in Nigeria.
- Albania: Warns citizens to use cryptocurrency responsibly.
- Afghanistan: The Ministry of Health plans to use blockchain to identify fraud in medicine. Still, crypto’s legal status is unclear.
-Angola: There is no legislation on it.
- Anguilla: They have policies regulating ICOs but make no mention of banning cryptocurrencies outright.
-Argentina: Specified that their Central Bank is the only one that can issue legal currency and emphasizes that citizens treat crypto responsibly.
- Belize: Belize has no crypto regulations to this date.
- British Virgin Islands: They have been regarded as ICO-friendly but nothing official on cryptocurrencies is available. The government is on standby with cryptocurrency policies, wanting to see how the crypto scene plays out first before further action.
-Brunei: There is an emphasis on cryptocurrency not being legal tender. The government urges caution.
-Cambodia: Although the government is developing its own currency backed by blockchain, cryptocurrencies are still a gray area legally, with the government warning of the potential risks involved with cryptocurrencies.
-Costa Rica: Cryptocurrencies are emphasized as the individual’s risk and responsibility and are not recognized as legal tender.
-Cuba: There is no overarching framework to operate crypto under the government. An exchange, however, has still propped up with no domestic backlash.
-Guatemala: Citizens are warned about the decentralized nature of cryptocurrency. It is not recognized as domestic or foreign tender.
- Haiti: No framework is given for crypto to operate on.
- India: Although there was a fear of a ban earlier in 2021, the government is going to create a board that will decide how to handle cryptocurrency.
- Honduras: Bitcoin and other cryptocurrencies are not backed by the country’s Central Bank. The individual is solely responsible for its risks.
- Kenya: The government has issued warnings of crypto’s volatile nature, lack of regulation, susceptibility to criminal activity and urges caution to the citizens who want to engage in it.
- Jamaica: The government urges caution when handling crypto.
- Latvia: Although crypto is subject to personal and corporate income tax, cryptocurrencies are still in a gray area legally in Latvia.
- Lesotho: Discouraging cryptocurrency practices, Lesotho does not allow the operation of cryptocurrencies that are unlicensed.
- Macau: The Monetary Authority of Macau discourages cryptocurrency participation.
- Malaysia: Bitcoin and other cryptocurrencies are not legal tender and the Malaysian government advises citizens to use them with caution. Using Bitcoin and cryptocurrency with transparency is heavily emphasized.
- Mexico: There is an emphasis for financial institutions to relay the risk of cryptocurrencies to citizens. It is not backed by the Central Bank and not considered legal currency.
- Moldova: The National Bank of Moldova suggests to tread cautiously.
- Montenegro: Crypto is regarded as the individual’s risk. Given their desire to join the European Union, and using the euro as legal tender, the government is treading cautiously with crypto.
- Pakistan: Although investigating cryptocurrencies for the potential of tax evasion and money laundering, Bitcoin and other cryptocurrencies are not recognized.
- Tajikistan: Although the Central Bank wants to make its own digital currency, it is one of the least cyber-secure places in the world, making crypto operate through means that are neither legal nor illegal.
- Tanzania: The Tanzanian shilling is the only one that is described as legal tender and crypto is legal but discouraged.
- Samoa: Crypto is not considered legal tender and is discouraged by the Central Bank for now because of its risky and speculative nature. Anyone wanting to conduct business with cryptocurrencies needs a business license. The Central Bank acknowledges the potential of blockchain.
- Zimbabwe: Cryptocurrencies are unregulated but the government cautions individuals about their use, citing its possibilities of terrorism financing and fraud.
Countries where Bitcoin is banned
- Algeria: Arguing that they are not backed by anything physical, Algeria has banned cryptocurrencies.
- Bolivia: The Central Bank has prohibited the use of cryptocurrencies because of their unregulated nature.
- Bangladesh: Citing possibilities for money laundering and being unauthorized by the Bangladesh bank, Bitcoin and other cryptocurrencies are illegal.
- Dominican Republic: Citing that they are not legal tender, cryptocurrencies are illegal in the Dominican Republic.
- Ghana: Although cryptocurrencies are regarded as illegal in Ghana, the Bank of Ghana sees blockchain’s potential and are assessing how to fit it into their financial structure.
- Nepal: Nepal’s central bank has banned Bitcoin because it is not a legal currency.
- The Republic of Macedonia: Citizens are warned that they cannot have crypto securities abroad. Crypto is still illegal.
- Quatar: Citing price volatility, possibility of financial crimes and lack of central government support, cryptocurrency activity is banned.
- Vanuatu: Several news outlets broke the story that Vanuatu accepted Bitcoin in exchange for citizenship. The country’s Citizenship Office, however, denied this. The country claims to accept only USD in exchange for citizenship.
Countries where use of Bitcoin is legally restricted
- Bahrain: You need a license in order to use crypto-asset services in Bahrain.
- China: China’s digital Yuan has issued on-chain wages, a first for the country. Although having researched cryptocurrencies for many years, China is treading cautiously in the market, listing a whole gamut of rules in terms of restricting Initial Coin Offerings (ICOs). China had the resources to operate with 70% of Bitcoin mining facilities, but that has been regulated by officials for environmental reasons.
- Hong Kong: A law may be enacted that might restrict crypto trading to individuals who have over $1 million in their investment portfolio. Other than this, Hong Kong emphasizes certain regulations when it comes to ICOs. Exchanges also need regulations in order to be enacted.
- Iran: Financial institutions are not permitted to handle cryptocurrencies.
- Kazakhstan: There are heavy cryptocurrency restrictions by the National Bank with exchanges and mining banned. A complete ban of cryptocurrency has been contemplated.
- Russia: Crypto is legal in Russia but is restricted. Banks and exchanges have to be registered by the Central Bank and crypto cannot be used as a payment method.
- Saudi Arabia: Once banned, Bitcoin is now legal in the country. Banks, however, are banned from participating.
- Turkey: Cryptocurrencies are not allowed as financial assets in banks. They also cannot be classified as payment tools.
- Vietnam: Although Bitcoin is still prohibited in trade relations by the State Bank, possession and trade in crypto is a tolerated occurrence for the average user. Research in the country is being done to further understand cryptocurrency and its implications.
