Experiencing the fluctuations in price along with careful considerations from many governments, how do you think the world management of Bitcoin and other cryptocurrencies has come to be?
Created in 2009, Bitcoin is expected to be the potential currency that could replace paper money. Most markets have supported and allowed Bitcoin, others are neutral, and few claim that Bitcoin is illegal. First, let’s take a look at the Bitcoin legal map below, last updated on May 2018 by Token Chart.
Legality of Bitcoin through 246 countries:
- Green (Legal) and Orange (Neutral): 99 countries (40%)
- Light pink (Restriction):10 countries (4%)
- Dark pink (Illegal): 7 countries (3%)
- Grey (No information): 130 countries (53%)
Currently, 99 in 246 countries (40%) support and do not have any restrictions for Bitcoin. Nearly 17 countries or 7% of the world either limit or consider Bitcoin as illegal. The rest of the world, or 130 countries (53%) do not have any information so far. These undecided countries may either enforce the new tender or set out further limitation for cryptocurrencies.
GREEN – THE SUPPORTERS
In general, the supports vary at different levels. It can be understood that “support” here means no restrictions from mining to using Bitcoin as a means of payment. However, the government in the green countries are still working on the regulations for Bitcoin by either re-adjusting or strengthening the rules so that Bitcoin will be more suitable with the current economic situation.
The first country to fully accept Bitcoin is Japan. As of April 1, 2017, Bitcoin is considered an asset and a legal means of payment, administered by the Japan Financial Services Authority (JFSA). Some big organizations have recognized Bitcoin as a legal currency. The laws in banking have not changed, but they are also being considered to make Bitcoin even usable in everyday life.
In October 2015, the Court of Justice of the European Union ruled that “The exchange of traditional currencies for units of the ‘bitcoin’ virtual currency is exempt from VAT” and that “Member States must exempt, inter alia, transactions relating to ‘currency, bank notes, and coins used as legal tender’”, making bitcoin a currency as opposed to being a commodity. According to judges, there should be no tax because bitcoins should be treated as a means of payment
Although not officially legal in the United States, the CFTC classifies cryptocurrencies as a trading item while the Treasury Department considers it as a money service business (MSB). The US government has been more open and positive about Bitcoin than many other countries. Although no financial manager considers it as a currency, Bitcoin is still reported in the tax returns. Additionally, The Financial Crimes Enforcement Network has been working on Bitcoin for a while, and Bitcoin is also available in the US derivatives market.
ORANGE – THE NEUTRAL
Orange is neutral markets that do not have direct legalization, but they also do not have any serious restrictions on the use of cryptocurrency.
In order to limit financial crimes, the government of India does not recognize Bitcoin and does not allow its citizens to use Bitcoin as a legal payment method. At the same time, the Central Bank of India recently announced that it would be illegal for financial institutions and banks to trade Bitcoin. However, experts say that individual investors in India could still hold Bitcoin and other cryptocurrencies, they can either exchange them into cash or trade through a foreign bank account. The Reverse Bank of India also said that they are looking at fiat cryptocurrencies rather than Bitcoin or other non-fiat cryptocurriencies.
At the end of 2017 and March 2018, the Vietnam government announced that any acts of issuing, distributing, using Bitcoin as a means of legal payment will be subjected to criminal prosecution, with fines up to $9000. These regulations also apply to limit the fraud, and Bitcoin trading, stocking and transferring in Vietnam is not prohibited.
LIGHT PINK – THE RESTRICTIONS
Light pink countries are restricted to Bitcoin markets due to many bureaucratic rules, regulations attempted to slow down the use of cryptocurrency.
China has been strengthening their restrictions on Bitcoin. Beginning by not accepting the ICOs, in early 2018 the People’s Bank of China announced that they would crack down on bitcoin mining and shut down bank accounts that relate to Bitcoin exchanges, China also bans internet and mobile access nationwide for everything related to Bitcoin transactions.
The People’s Republic of China is by far the most stringent cryptocurrency regulator since 2017, despite the increasing rate of Bitcoin being accepted and a huge number of Chinese miners that makes up more than 50% of the world’s miners. The information of whether Chinese people are still able to trade Bitcoin or not remain a question, as the government is currently studying the potential of Bitcoin and may soon turn into favoring cryptocurrency space.
DARK PINK – THE ILLEGAL
Countries with dark pink color are completely opposed to cryptocurrencies. These 7 countries include Algeria, Bolivia, Ecuador, Bangladesh, Nepal, Macedonia, and Russia. Noticeably, Russia is currently the largest country that officially considers Bitcoin as illegal.
THE BOTTOM LINE
Overall, it takes time for many countries to look into the legality of Bitcoin. The world regulators are on the way of exploring other aspects as well as the influence of Bitcoin on the economy in general. This also explains why some countries in the gray area have not made any comments about the cryptocurrencies space. However, the growing speed of Bitcoin still surpasses the expectations of the experts. In the end, we may question the future of Bitcoin, but the positive impacts that new tender has made on the financial markets is so far undeniable.
Collected and compiled by Remitano.