Is Bitcoin Legal? : Bitcoin Legal Status In The US And Other Countries

Nations around the world are exploring ways to regulate revolutionary cryptocurrencies. Meanwhile, many investors wonder: Is Bitcoin legal?

In this article, we will look at the stance of the U.S on cryptocurrencies and some other countries and find out if Bitcoin is legal there?

Is Bitcoin Legal In The U.S?

Recent years have witnessed something like the groundwork for cryptocurrency regulation. Legislators at both the federal and state levels are trying their hands-on various aspects of the industry.

Agencies such as the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) supervise certain parts of the expanding crypto markets.

These financial watchdogs did issue rules, guidelines and warnings; however, a combined effort is yet to be seen.

With the rapid adoption of cryptocurrencies, it has become clear to the authorities that the crypto industry is going to thrive more and more. A crypto executive order signed by President Biden encouraged major federal agencies to put in a coordinated effort at devising cryptocurrency regulations for preventing illegal use and safeguarding investors without curbing innovation as of March 2022.

Meanwhile, some states have established their own laws regarding cryptocurrencies.

Texas and Wyoming have come forward with crypto-friendly laws for attracting businesses.

In June 2021, the State passed the Texas Virtual Currency Act that gave cryptocurrencies legal status as a digital representation of value which is a store of value and used as a medium of Exchange. Also, letting state-chartered banks provide crypto services to clients.

These different patchworks of regulation might be confusing for some. In simple words, Bitcoin is legal in the U.S. However, where and how and which exchanges and services you use to buy it vary in different states of the country.

Is Bitcoin Legal In The European Union?

Let’s look at the stance of the European Union on Bitcoin. Bitcoin and altcoin are recognized as crypto-assets in the European Union. Again, it is not illegal to use Bitcoin within the territory of the EU; however, the authority that is in charge of regulating cryptocurrency in the union has cleared that the activities related to cryptocurrencies do not come under its control. But, the authority continues to issue warnings to the businesses and public about the risks associated with digital assets.

What About Canada? Is Bitcoin Legal There?

Canada, too follows the steps of the U.S, its neighboring country. In short, Canada is Bitcoin-friendly, and Bitcoin is given the status of a commodity by the Canada Revenue Agency (CRA) for income tax purposes. This translates to the fact that any earning from a transaction using Bitcoin is considered a capital gain or business income and needs to be reported as the same.

Countries Where Bitcoin Is Legal

Denmark, Germany, Japan, Mexico, Spain, Iceland, France, and the United Kingdom are the countries where Bitcoin transactions are permitted and have regulations.

Countries That Have Imposed Ban On Bitcoin

As of November 2021, according to the library of Congress, there are around 42 countries that have implicit bans on certain uses of cryptocurrency.

Bahrain, Central African Republic, Burundi, Cameroon, Guyana, Gabon, Lesotho, Kuwait, Georgia, Libya, Macao, Maldives, Vietnam, and Zimbabwe.

While many parts of the world have embraced Bitcoin, many remain skeptical about its volatility and decentralized nature. At the same time, many governments perceive it as a threat and have concerns regarding its explicit use, such as terrorism, drug trafficking and money laundering. It would be interesting to witness whether these countries will embrace Bitcoin and make it legal.