Bitcoin is believed to be an entirely independent currency, no one controls it, and relatively no one individually can affect its behavior on the market, except for everyone, generally. This makes Bitcoin unique when comparing it to other currencies.
Bitcoin is autonomous, nevertheless it is differently regulated in various countries. It turned out that there are plenty of various shades of Bitcoin legalization: some countries accept it, others also do but don’t consider Bitcoin money, some forbid Bitcoin at the initial stage, but at the same time Bitcoin can be perceived as international digital money anyway.
So, as you can see the situation is quite complicated, because it’s not just that Bitcoin is either forbidden or allowed in different countries there are many more regulations that can be applied to it.
Analysis of crypto regulation in different countries
Here’s a brief narration about the regulation of Bitcoin in different countries.
The United States of America
The USA is believed to be one of the most auspicious countries, where you can conduct business with Bitcoin. Although in order to do this, you should really know how things work, because Bitcoin is regulated not only by the US federal government, but also by state law, that, as you may know, can differ, thus in the USA Bitcoin can be considered as money, as a merchandise and as an exchange commodity.
Basically, in America Bitcoin is fully accepted, although being in a certain state you should know the state laws. For instance, in Washington a company can conduct transactions with a private individual, only having the Washington Money Transmitter License. While, in California, they have the law that permits any money turnover, even if the currency is different from the legal tender.
At the same time crypto businesses, such as exchanges, are very strictly regulated.
Canadians are doing great, they not only accept and regulate crypto business, but also work on making a digital version of Canadian dollar based on technology similar to blockchain. In other words, Canada is looking into the future and in every way inspire its people to do the same.
In order to protect Canadians from swindlers the government introduced a law that requires all crypto exchanges to register in FINTRAC. The law not only covers exchanges based in Canada, but, primarily those that aim to provide its services there, even if based in another country.
The United Kingdom
The United Kingdom is extremely interested in making a progressive financial system, where you could find a perfect combination of fiat and crypto currencies. They encourage every startup and innovation in the following sphere. Although, being in a sort of legal void, cryptocurrency is neither considered money, nor currency, thus it is not regulated by the financial and legal systems of the UK as for fiat.
Although the requirements for exchanges are very strict. That’s why there are not so many exchanges in the UK, and the existing ones abide by all standards and regulations. One such example is CEX.IO bitcoin exchange, which was established far back in 2013 and is now recognized internationally.
The mining of cryptocurrency, or exchanging it into fiat is not taxed, although the providers of merchandise sold for Bitcoins are charged with the value-added-tax.
Being the world’s most advanced mining country and one of the best exchange providers, China is still uncertain about Bitcoin. Firstly they claim that financial institutions are prohibited to take part in Bitcoin transactions, than they define Bitcoin as a virtual commodity, not money.
Although the Chinese Bitcoin community has enough right to affect the further development of Bitcoin, the government still interferes in the crypto infrastructure in full measure.
Meanwhile, the internet has been lit up by the information that the Chinese government is working on making their own cryptocurrency.
The position of Russia towards cryptocurrency can be compared with a child in kindergarten who takes a fork in his hand, puts it away and repeats that cycle again and again. While other kids study up on how to eat their food with a fork and knife, this one is afraid to hurt himself.
Recently “surrogate” has been Russia’s favourite word regarding Bitcoin. Although, it took only a couple of years for Bitcoin to prove itself as a credible currency so Russia has now forgotten the word “surrogate” and is currently working on the regulation of it. So, basically, Russia has accepted the “fork” and perhaps will be the first to regulate it, or not. Let’s see how it plays out.
In Europe, the situation is very similar to the US. Because just like the American states, Europe has a number of almost 30 countries that have their own laws. Generally, the European Union’s position to Bitcoin is following: They see it as a different branch of finances, that’s why the regulative and taxing issues, in their opinion, must be different from fiat.
In essence, Europe still hasn’t got a precise regulation for cryptocurrency, although they are making its way on it. At the moment they have established the obligatory requirement for the exchanges to implement the KYC (Know Your Customer) Policy.
Where is Bitcoin Banned?
Only two years ago, you could probably make up a list of top-ten countries where Bitcoin is banned. Now there are only few countries that are hostile to cryptocurrency.
In Iceland Bitcoin is partially forbidden. The thing is that they are still striving against the 2008 crisis, doing everything possible to equalize the exchange rate of their own currency and Bitcoin could make a bit of a mess in this process.
Still, Iceland has cryptocurrency mining farms which are, by the way, legal there. In Iceland it is legal to own and even sell Bitcoin, but what is forbidden to do – is to buy them, because this hinders the development of their own currency.
The other countries like Bangladesh, Ecuador, Bolivia, Kyrgyzstan, Dominican Republic are hostile to Bitcoin because of the same reasons: they cannot control it, there is no central payment system, etc.
Recently, Russia and China have been among these five countries in the list. Now, they are not. Chinese government is still contentious about cryptocurrency, but you cannot say that they ban it, at least due to the fact that China makes up almost half of the Bitcoin blockchain transactions, while Russia is already working on regulating Bitcoin.
What is Bitcoin then?
By the end of the article, you probably have that question in your mind. After all, Bitcoin is cryptocurrency. While only few countries consider it money, the rest define it as a merchandise.
For us, the people, Bitcoin is money, because it’s a way how we complete financial transactions with each other. In the legal field Bitcoin is something utterly new and since our banking system implies money only in the fiat aspect, it is hard to define cryptocurrency according to the initial Banking law.
Although, we can see that each year of existence brings Bitcoin a more fundamental settlement in the legal field of every country. The UK, Japan, the USA, Canada – these are all good examples of countries that look forward.
It means a lot to the cryptocurrency world that they not only accept Bitcoin but also take part in its development, leading the way for the rest.