Is Bitcoin Legal?

When the market capitalization of the cryptocurrency market surged, through price movements and a surge in new tokens, regulators around the world increased the debate about overseeing the use and trading of digital assets.

This affects all cryptocurrency, especially bitcoin, given the market leadership and its integration into the global startup ecosystem.

Very few countries claim that bitcoin is illegal. However, that does not mean that bitcoin is a "legal tender" - so far, only Japan has so far provided that title. However, just because something is not a legitimate tender does not mean that it cannot be used for payment - it simply means that there is no protection for consumers or traders, and that its use as payment is entirely discretionary.

Other jurisdictions are still considering what steps to take. The approach varies: some smaller countries such as Zimbabwe have little doubt about making brazen statements raising doubts about the legality of bitcoin. Larger institutions, such as the European Commission, recognize the need for dialogue and deliberation, while the European Central Bank (ECB) believes that the cryptocurrency is not mature enough for regulation (although with almost 10 years of bitcoin, people wonder when we will know it has reached maturity sufficient). In the United States, this problem is further complicated by a cracked regulatory map - who will make laws, the federal or state government?

Questions related in other countries, where there is no clear answer, are: should the central bank oversee the cryptocurrency, or financial regulator? In some countries they are one and the same thing, but in most developed countries, they are separate institutions with different authorities.

Another divisive problem is: should bitcoin be regulated on a national or international basis? France is pushing for the G20 (international forum for the government and central bank) to discuss parameter setting at the upcoming summit in April 2018.

Further differences need to be made between the regulation of cryptocurrency itself (whether it's commodity or currency, is it a legal tender?) And the cryptocurrency business (are they money transmitters, do they need a license?). In some countries, the considerations are interrelated - in most other countries, these considerations have been dealt with separately.

Below is a brief summary of statements made by certain countries. This list is updated every month.

Australia
In October 2017, the Australian Senate began debating a bill that would implement anti-money laundering laws for the exchange of the country's crypto currency, as well as the mandate of criminal charges for exchanges operating without licenses.

In the same month, the tax authorities removed "double taxation" from bitcoin, which was the result of a decision in 2014 to treat cryptocurrency as "barterable goods" rather than currencies or assets.

At the end of 2017, the cryptocurrency exchange must register with the Austrac state financial intelligence agency, and comply with customer verification and record preservation requirements.

Further steps are not possible at the moment, however, because officials from the central bank recently said that regulations are not needed to use cryptocurrency as payment.

Argentina
Apart from a strong bitcoin ecosystem, Argentina has not yet compiled regulations for cryptocurrency, even though the central bank has issued an official warning about the risks involved.

Bangladesh
In 2015, Bangladesh expressly stated that using cryptocurrency is "a punishable violation."

Bolivia
In 2014, the Bolivian central bank officially banned the use of any currency or tokens not issued by the government.

Canada
Canada was one of the first countries to compile what could be considered the "bitcoin law," with the passing of the C-31 Bill in 2014, which established "virtual currency businesses" as "money service businesses," forcing them to abide by anti-laundering your client's money and requirements.

The government has determined that bitcoin is not a legal tender, and the state tax authority has considered bitcoin transactions to be taxed, depending on the type of activity.

China
While China does not ban bitcoin (and insists on not having plans to do so), China has cracked down on bitcoin exchanges - all the major bitcoin exchanges in the country, including OKCoin, Huobi, BTC China, and ViaBTC, suspension of trading book orders from digital assets against the yuan at 2017.

It also seems to attract preferential treatment (tax reduction and cheap electricity) for bitcoin miners.

Ecuador
In 2014, the Ecuador National Assembly banned bitcoin and decentralized digital currencies while making guidelines for creating new government-run currencies.

Egypt
In January 2018, the Grand Mufti of Egypt stated that cryptocurrency trading is prohibited under Islamic religious law because of the risks associated with these activities. Although this is not legally binding, it is considered a high level legal opinion.

Europe
The European Union takes a cautious approach to the regulation of crypto currencies, with several initiatives underway to involve sector participants in the formulation of supportive rules. The focus seems to be on learning before organizing, while increasing innovation and considering ecosystem needs.

The European Central Bank (ECB), however, is pushing for tighter control over the movement of digital currencies as part of a broader crackdown on money laundering, while recognizing the complexity of jurisdiction in regulating unlimited assets. At the end of 2017, an ECB official stated that the agency did not see bitcoin as a threat, and president Mario Draghi recently confirmed that, in the eyes of the ECB, bitcoin was not "mature enough" for regulation.

In April 2018, MPs voted in a majority to support the December 2017 agreement with the Council of Europe for measures aimed at, in part, to prevent the use of cryptocurrency in money laundering and terrorism financing.

G20
The G20 - consisting of 20 of the largest economies in the world - has recently turned its attention to cryptocurrency in general, and committed to formulating recommendations on the first steps towards regulation in July 2018.

India
The Indian central bank has issued several official warnings about bitcoin, and at the end of 2017 the country's finance minister clarified in an interview that bitcoin is not a legitimate tender. The government does not yet have regulations covering cryptocurrency, even though it is looking for recommendations.

The central bank, however, has banned Indian financial institutions from working with cryptocurrency exchanges and other related services (a ban recently enforced by the country's Supreme Court).

Iran
In April 2018, Iran's central bank and one of its main market regulators said that financial businesses should not deal with bitcoin or other digital currencies. In addition, CoinDesk recently reported on government censorship of cryptocurrency exchange sites operating in the country.

Japan
Japan was the first country to expressly declare a bitcoin "legal tender," passed a law in early 2017 that also carried bitcoin exchanges under anti money laundering rules and your know-customer rules (although the license application was temporarily suspended because regulators deal with hack on the Coincheck exchange at the beginning of 2018).

Recently the Financial Services Agency has cracked down on the exchange, suspended two, issued an increase order for several and mandated better security measures in the other five. It has also formed a cryptocurrency exchange industry study group that aims to examine institutional issues regarding bitcoin and other assets.

Kazakhstan
According to reports, the National Bank of Kazakhstan recently hinted at a plan to ban trade and mining of cryptocurrency, even though no strict regulations had been passed.

Kyrgyzstan
Kyrgyzstan's central bank said in 2014 that using cyrptocurrency for transactions was illegal.

Malaysia
The Malaysian Securities Commission cooperates with the country's central bank in the framework of the cryptocurrency regulation.

Malta
The European island recently issued a series of laws that are friendly to the block chain, including those detailing the requirements for registration of cryptocurrency exchanges.

Mexico
In 2014, the Mexican central bank issued a statement that prevented banks from transacting in virtual currencies. The following year, the finance ministry clarified that, although bitcoin is not a "legal tender", bitcoin can be used as a payment and therefore be subject to anti-money laundering restrictions similar to cash and precious metals.

At the end of 2017, Mexico's national legislature approved a bill that would bring local bitcoin exchanges under the supervision of the central bank.

Morocco
Towards the end of 2017, the Moroccan foreign exchange authority stated that the use of cryptocurrency in the country violated foreign exchange regulations and would be subject to punishment.

Namibia
Namibia is one of the few countries that expressly states that buying with bitcoin is "illegal."

Nigeria
While Nigerian banks are prohibited from handling virtual currencies, the central bank works on a white paper that will draft the concept of an official attitude about using cryptocurrency as a method of payment.

Pakistan
In April 2018, Pakistan's central bank issued a statement banning financial companies in the country from working with cryptocurrency companies.

Russia
The draft cryptocurrency legislation from the financial regulator State Duma is expected in mid 2018. The focus seems to be on protecting citizens from fraud, while allowing individuals and businesses to work legally with cryptocurrency.

The State Duma's efforts have been supported by Putin's own mandate, issued in October 2017, urging the development of a "single payment room" in the Eurasian Economic Union (alliance of countries including Armenia, Belarus and others), increasing oversight of token sales, and licensing bitcoin mining operations.

Singapore
The Monetary Authority of Singapore reportedly checks whether there are new regulations needed to protect cryptocurrency investors, and while it is not possible to ban cryptocurrency trading, it is considering imposing anti-money laundering and terrorism financing regulations on the exchange.

The central bank also works on the regulatory framework for bitcoin payments, and has issued a warning about bitcoin investment.

south Africa
In 2017, South Africa Reserve Bank adopted a "sandbox approach," testing the bitcoin design and regulation of crypto currencies with a handful of new startups.

Johannesburg, South Africa

South Korea
In early 2018, South Korea banned anonymous virtual currency accounts. And in an effort to curb crypto currency speculation, authorities are working on increasing exchange controls (which could include licensing schemes), although the governor of the Financial Supervisory Agency said the government would support trading in "normal" crypto currencies.

In an interesting strategic change, a recent report in the South Korean press indicated that the country's financial authorities were in talks with similar agents in Japan and China regarding joint monitoring of cryptocurrency investments.

In April 2018, the Fair Trade Commission ordered 12 country crypto currency exchanges to revise their user agreements.

Thailand
After allegedly declaring bitcoin illegal, the Bank of Thailand issued a backward statement in 2014, clarifying that it was not a legal (but not technically illegal) tender, and a risk warning.

In March 2018, the executive branch of the government temporarily ratified two royal decision concepts, set formal rules to protect crypto currency investors (as well as establish KYC requirements), and set taxes on their capital gains. The draft has not received final cabinet approval.

United States of America
The United States is disrupted by a fragmented regulatory system, with state and federal legislators responsible for layered jurisdiction and complex separation of powers.

Some countries are more advanced than others in cryptocurrency supervision. New York, for example, launched controversial BitLicense in 2015, giving the official green bitcoin business to operate in the state (many startups leaving the state as a whole rather than complying with expensive requirements). In mid-2017, Washington passed a bill that applies money-transmitting laws for bitcoin exchanges.

New Hampshire requires bitcoin sellers to get money transfer licenses and send bonds worth $ 100,000. In Texas, the state securities commission monitors (and, sometimes, turns off) investment opportunities related to bitcoin. And California is in limbo of bitcoin regulations after freezing progress in the 1326 bill which - though criticized for problems such as overly broad definitions - is seen as less oppressive than BitLicense in New York.

At the federal level, the focus of the Securities and Exchange Commission is on the use of blockchain assets as securities, such as whether certain bitcoin investment funds must be sold to the public, and whether a particular offer is fraud.

The Commodities Futures Trading Commission (CFTC) has a greater track potential in the regulation of bitcoin, given the establishment of cryptocurrency as a "commodity." Even though it hasn't compiled a comprehensive bitcoin regulation, its efforts have recently focused on monitoring a newborn future. market. He has also filed claims in several bitcoin-related schemes, which underline his intention to use jurisdiction over cryptocurrency whenever he suspects fraud.

The Uniform Law Commission, a non-profit association that aims to bring clarity and cohesion to state law, has designed a Uniform Virtual Currency Business Law Regulation, which some countries are considering introducing in the upcoming legislative session. This law aims to describe which virtual currency activities are money transfer businesses, and what types of licenses they will need. Critics fear it's too similar to New York BitLicense.

Great Britain
The UK Financial Conduct Authority (FCA) sees bitcoin as a "commodity," and therefore plans to regulate it. This has hinted, however, that it will act to monitor the derivatives related to bitcoin. The lack of consumer protection has been behind the recent FCA warning about the risks inherent in cryptocurrency.

Ukraine
The Ukrainian government has formed a working group consisting of regulators from various branches to develop cryptocurrency regulation proposals, including determining which bodies will have supervision and access. Also, the existing bill before the legislature will bring the exchange of crypto currencies under the jurisdiction of the central bank.

Zimbabwe
At the end of 2017, a senior official from Zimbabwe's central bank stated that bitcoin was not "completely legal." While the extent to which it can and cannot be used is unclear, the central bank seems to be conducting research to determine risk.
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