Legality of Cryptocurrency in the world
Cryptocurrency is becoming a global trend. Many countries in the world have recognized the legitimacy of the digital currency by using it as a mean of payment. However, in some other countries, people still have doubts about the value of this type of money. So which countries accept Cryptocurrency? This article will give you some information about the legality of Cryptocurrency in the world and some notices in some countries.
What is cryptocurrency?
In the fourth industrial revolution, the concepts Cryptocurrency, digital currency or virtual currency,…is familiar to most people, especially who are interested in finance and securities. However, not all people have right understanding of this currency. Lack of understanding leads to misconceptions as well as doubts about Cryptocurrency.
Cryptocurrency is a digital currency that is created by complex encryption algorithms in the form of open source software. Cryptocurrency is exchanged through internet-connected devices instead of with the help of any intermediary. Cryptocurrency is not virtual money that has no real value because it is used in transactions, payments and services. Many countries, organizations in the world such as the European Union EU, Japan, Germany, Switzerland. , or big companies like Dell, Microsoft, Apple, .. have accepted Cryptocurrency (Bitcoin as an example) as a currency for payments.
Which countries have legalized Cryptocurrency?
The European Union has not passed any specific laws regarding the digital currency yet. However, in October 2015, the European Union Court of Justice ruled, “The exchanges of traditional currencies for Cryptocurrencies are exempt from VAT.” Thus, member states must consider cryptocurrency-related transactions legal. Cryptocurrency is accepted by the EU.
European Union has accepted the existence of this currency due to its utility and popularity. Many companies around the world have accepted transactions with Cryptocurrency that encourages more and more people to use this money in commodity exchanges, services.
Japan was the first country in the world which completely adopt Cryptocurrency in commercial transactions. This digital money is considered a legal payment in this country from 1st April 2017. Although laws in banking have not been changed, Cryptocurrency is likely to be used in everyday life.
The United States Department of Finance classified Cryptocurrency as a decentralized, convertible digital currency in 2013. On a hearing in November 2013, Cryptocurrency received good assessments from law-makers. By 2105, Futures Trading and CFTC classified it as a commodity, and each IRS, BTC is taxed as an asset.
Cryptocurrency in general and Bitcoin in particular will be governed by the anti-money laundering and anti-terrorism law in Canada which is based on federal budget law (C-31) passed in 2014. The Marches Fund, a Quebec administration has stated that several Bitcoin-related business models and ATMs are adjusted by the MSB Act.
According to the Fintech law, Bitcoin and Cryptocurrency have been legal in this country since 2017.
Many other countries and regions have adopted Cryptocurrency as a type of currency, and some others accept it with some limitations such as China, India, …
Which countries now refuse Cryptocurrency?
Despite having been accepted and used in many countries, this type of money are still rejected in a few countries. The example is Iceland, which has the largest mining enterprises, but people are not allowed to buy coins. Surprisingly, mining coins is possible but buying is illegal in this country. Other countries in this group are Bolivia, Ecuador, Bangladesh and Kyrgyzstan.
The other countries are still considering Cryptocurrency. Although it has not been accepted, but it is not prohibited. There are some reasons for that:
- Firstly, this currency operates on decentralized internet which is difficult to control.
- Secondly, the technology behind it – Blockchain has great security, no one can intervene directly in the Blockchain network.
- Finally, because Cryptocurrency has certain outstanding features such as low cost, time-saving, convenient, and necessary for the development of the society, prohibition is impossible.
China issued a law banning ICO-related activities in September. However, some experts suppose this is not an official prohibition law. In fact, ICO activities in China are still being carried out as they are difficult to control.
In conclusion, cryptocurrency is becoming a global trend with widely recognition in the world. Some countries are trying to control what is uncontrollable. Thanks to some excellent features, it is impossible to stop the development of cryptocurrencies.