The purpose of this post is to summarise Bitocin’s legal status and give a general overview of it’s adoption around the world.
Table of Contents
- The purpose of this post is to summarise Bitocin’s legal status and give a general overview of it’s adoption around the world.
- Australia: The Bitcoin Land Down Under
- Belgium: Bitcoin Isn’t a Problem
- Canada: Bitcoin Ho!
- China: A Love-Hate Relationship
- Denmark: Bitcoin Left in the Cold
- Finland: Bitcoin Accepted Here
- Germany: Bitcoin isn’t Money But is a Commodity
- India: Central Bank Setting its Sights?
- Israel: Bitcoin’s Fate Undecided
- Japan: No Ruling Despite Mt. Gox’s Presence
- Kenya: Bitcoin Loved By the People but Government Remains Silent
- Lebanon – Not so in favor
- Netherlands: Legal but Taxable
- Norway: Bitcoin as a currency? No Way. But Trading Still Legal.
- Poland: A Country Unable to Decide
- Singapore: See No Bitcoin, Hear No Bitcoin, Interfere with No Bitcoin
- Sweden: Sweet On Bitcoin? Not So Quick
- Thailand: Bitcoin Under Fire
- United Kingdom: United On a Legal Bitcoin?
- United States: of America Home of the Free, Land of the Bitcoin
All data posted here is based on reliable news sources. If you notice any inaccuracies you can post them in the comments below or contact me through this form.
Bitcoin is a new and radical currency, so its legal status may change quite rapidly over time. Most countries right now do not have an official policy or stance regarding Bitcoin, though governments are beginning to take notice. So far few countries have explicitly outlawed Bitcoin, though it should also be noted that few countries have extended official legal recognition to it either.
By and large, Bitcoin is often being treated as a sort of investment vehicle, rather than an actual functioning currency. Initially, some people assumed that stealing Bitcoins was not illegal as the currency has no official legal standing. Most countries and legal systems do recognize that Bitcoin does have value, and such it is afforded some measures of legal protection. While court systems are still trying to work out the details of Bitcoin, the currency is slowly being given recognition.
Australia: The Bitcoin Land Down Under
So far, the Australian government has been pretty warm towards the Bitcoin. Companies are allowed to trade in Bitcoins, and buying or mining Bitcoins is not considered illegal. The Australian government has released tax guidelines for the country, so if you are making money off the currency, you’d better be prepared to fork over the government’s share. In a certain sense, however, this does show that the government is acknowledging the value and potential of the currency.
Belgium: Bitcoin Isn’t a Problem
Belguim is known for being a pretty relaxed and progressive government. So far, the government has decided to take a hands-off approach to the currency. Belguim’s finance minister has publicly stated that he sees no problem with the currency and that the national bank would have no objections to it. The country’s money laundering agency has also not released any guidelines or warnings against the currency, at least not yet.
Canada: Bitcoin Ho!
Canada is known for being a pretty friendly government, and it turns out that the Canadian government has been willing to embrace Bitcoin with open arms. So far, the government has decided that anti-money laundering and financial crimes regulations will not need to be fully applied to Bitcoin. Bitcoin transactions are viewed as barter transactions, and any gains made will be taxed. This also affords some legal protections, however, so Bitcoin users should feel confident about Bitcoin and its legality in Canada.
China: A Love-Hate Relationship
Another country that has begun to crack down on Bitcoin is China. The Chinese government initially looked ready to embrace Bitcoin, but as investments into the currency surged, the government reversed course. When Chinese investors started to pour money into Bitcoin, the currency’s value sky-rocketed above $1,000 dollars. For better or worse, however, this caused the Chinese government to get cold feet.
In early December the government started to issue warnings against the currency. The government also began to look into ways in which the currency could facilitate money laundering and other illegal activities. The Chinese government also stated that it would aggressively defend the value of the Chinese renminbi against Bitcoin.
Denmark: Bitcoin Left in the Cold
Denmark is known around the world for being one of the most progressive countries. In regards to Bitcoin, however, Denmark is still stuck in the ice age as the government has not warmed to the currency. Danish officials earlier determined in the aftermath of a massive Bitcoin theft that the currency warranted no legal protection.
The Danish Central Bank also announced that it was exempting Bitcoin from its currency functions. The government is considering a sweeping set of reforms and new regulations that could lead to Bitcoin being a regulated, or at least monitored and protected market.
Finland: Bitcoin Accepted Here
Finland is one of those countries that just loves to lead the way on just about everything. From its top-notch education system, to its world renowned health care, Finland often tops the charts in terms of livability. It should come as no surprise then that Finland’s government has confirmed the legality of Bitcoin and declared that it is up to the people to choose which currency they want to hold their money in.
Not only that, but Finland is one of the first countries to have a Bitcoin ATM machine installed. That’s right, if you want to conduct Bitcoin transaction, you can now head to the Helsinki Railway Station and conduct trading via a Bitcoin ATM, one of the first in Europe.
Germany: Bitcoin isn’t Money But is a Commodity
The German government has stated that Bitcoin is neither a traditional or electronic currency. The government has, however, recognized that Bitcoin does have value and has decided that it should be treated as a commodity or financial instrument. While this might seem like a blow to some Bitcoin users, this actually affords the currency a considerable amount of legal protection. Of course, as a commodity you are liable for paying taxes on any gains.
India: Central Bank Setting its Sights?
Bitcoin has come under fire in India. Initially, investors were very interested in Bitcoin, especially as the Indian Rupee has come under fire in recent months. Investors saw Bitcoin as an opportunity to pull their money out of the rupee. As the Indian government has been tightening capital outflows and gold/silver purchases, Bitcoin offered an easy way to protect ones’ wealth from a decline in the local currency.
The Central Bank, however, has issued a warning against Bitcoin and conducting trading in Bitcoin. Indian police officers even raided the offices of one exchange and seized transaction records. This sent a huge ripple through the market, causing many of India’s Bitcoin exchanges to shut their doors. The Central Bank has slammed Bitcoin over security issues and also questioned the value of the currency.
On late December 2013 the Indian federal enforcement directorate raided buysellbitco.in – India’s largest Bitcoin exchange.
Israel: Bitcoin’s Fate Undecided
Is Bitcoin a legal currency? Is it an investment vehicle subject to taxing? Or is it simply illegal? These questions are being asked in Israel, though the answers may not yet be forthright. So far the Bank of Israel has not outlawed or regulated the currency, though it is pondering actions for or against it. Future rulings could have a big impact on Bitcoin’s status. Several individuals have reported though that banks are suspending Bitcoin related transactions.
The biggest concerns for the Israeli government center around the potential use of Bitcoin in illegal and illicit transactions. Bitcoin has yet to be outlawed, however the inability of anyone to be able to monitor the currency could lead to future regulations against it.
Japan: No Ruling Despite Mt. Gox’s Presence
So far, the Japanese government has remained largely silent on Bitcoin. That might not seem surprising except for one important fact: Japan is home to Mt. Gox, the world’s largest Bitcoin exchange. That’s right, despite the fact that Japan is the epicenter of Bitcoin trading, at least in a certain sense, the country has not ruled on the legality of Bitcoin. This is normally where we cut off and say “more on the topic”, but as of yet there isn’t more on the topic. Regardless, any future ruling for or against Bitcoins in Japan could have ramifications for the global Bitcoin market.
Kenya: Bitcoin Loved By the People but Government Remains Silent
So far, the Kenyan government has not released any opinion regarding Bitcoin. None-the-less, the currency has been adopted by Kenyans working abroad to send their money home. Many Kenyans are using Bitcoin to send remittances home without being taxed. With Kenyans sending more than 1 billion dollars home per year, Bitcoin is quickly becoming a major player in this East African country. Still, the government has not yet stated an opinion on the currency, so things could change in the future.
Lebanon – Not so in favor
On December 19 2013, the Bank of Lebanon issued a warning against purchasing, keeping or using e-money. In an announcement Issued banks, financial institutions, exchanges and for the public, the central bank warns against the dangers that might result from speculated money and especially Bitcoin.
Netherlands: Legal but Taxable
Most countries are recognizing it as an asset, however, and so far governments love taxing Bitcoin. The Netherlands has not outlawed Bitcoin, but has announced that it will tax the currency.
Norway: Bitcoin as a currency? No Way. But Trading Still Legal.
Where Sweden goes, so often does Norway and vice-versa. Norway has agreed with Sweden in many respects. Bitcoin is not illegal, and Bitcoin trading is perfectly legal. Like other governments including Sweden, however, Norway has ruled that Bitcoins are legal, but also liable to being taxed. Currencyies generally aren’t taxed, after all it is merely the exchange of one currency for another. If Bitcoin can be taxed, then it is not a real currency, but instead an investment vehicle. This could have big implications for the future of Bitcoin.
Poland: A Country Unable to Decide
Initially, the Polish government declared that Bitcoin was legal, though did not confirm it as a legal currency. This is important because Poland has a VAT tax, and if Bitcoin is not a commodity, but instead an investment asset, it could potentially be taxed through the VAT tax.
Recently, however, Poland has taken a bit of a step back in regards to the legality of Bitcoin. The digital currency is still legal, but the government has ruled out its status as a currency. Additionally, and perhaps more importantly, the government has taken a “wait and see” approach and said that it would monitor how other European Union countries react to Bitcoin in regards to regulation.
Singapore: See No Bitcoin, Hear No Bitcoin, Interfere with No Bitcoin
Singapore has built a reputation as a market friendly country, and the government is sticking to its guns when it comes to Bitcoin. While Singapore may be home to only five million people, the country is one of Asia’s most important financial centers, so its deeds carry a lot of weight. The Singapore government has announced that it will not regulate or interfer with Bitcoin, but will instead let the market ride. The Central Bank has also stated that it is up to companies to determine if they want to accept Bitcoins.
Sweden: Sweet On Bitcoin? Not So Quick
First, you can buy and sell Bitcoin in Sweden without any fear of it being outlawed, at least not in the near future. That does not mean, however, that Bitcoin is recognized as a fully legal and convertible currency. As is becoming a common trend around the world, the Swedish government is not approaching Bitcoin, but is instead looking to profit off of Bitcoin investments. The Swedish government is looking to add a value-added tax, which some believe would destroy its potential as a legal currency.
Thailand: Bitcoin Under Fire
No country has yet outlawed Bitcoin, though Thailand’s Central Bank has claimed that conducting transactions with Bitcoins is illegal. This does not amount to an official ban, however, as the Bank of Thailand does not have the authority to pass laws. So far Thailand’s Ministry of Finance has not yet ruled on the matter.
While Bitcoin has not yet been officially outlawed, it would not be surprising if the Thai government did take action against the currency. Following the 1997 Asian Financial crisis, the Thai government has been very aggressive in defending the value of its currency and the stability of its financial system. If Bitcoin is viewed as a threat, the government would likely move against it.
United Kingdom: United On a Legal Bitcoin?
The United Kingdom has thus far ruled in favor of Bitcoin. According to the government, Bitcoin is legal, but has not yet been ruled as a currency. Instead, Bitcoin is considered a “single use voucher”, which leaves it liable for value-added taxes. It should be noted, however, that this ruling is not yet permanent. If you are located in the United Kingdom, or plan on conducting trading through the UK, make sure you keep up-to-date on the most recent rulings.
United States: of America Home of the Free, Land of the Bitcoin
In many ways, Bitcoin’s ultimate aim is to take on the U.S. dollar as the world’s premier currency. Given that, it’s somewhat suprising that the United States has been one of the nation’s to offer the most support to Bitcoin, at least at the Federal level. The United States Congress even held a hearing on the currency and heard from prominent financial experts and Bitcoin community members. By and large, the committee agreed that Bitcoin was a good thing. A Federal judge in Texas also ruled that Bitcoin is a legal currency.
Some state governments, however, are taking issue with Bitcoin. For example, the state of California sent a cease and desist article to the Bitcoin foundation. Still, the state government’s words have so far been nothing but hot air and Bitcoin trading and services have continued largely unabated even if it irks government officials.