The legalization battle of cryptocurrencies is going on ever since the success stories of bitcoin started surfacing the internet. The term ‘cryptocurrency’ refers to a digital currency that is used for performing digital transactions and uses cryptography to ensure the security of such transactions.
Bitcoin (BTC) may have been the first widely successfully cryptocurrency, but it was soon followed by many others, including Ethereum (ETH), Litecoin (TCC), Dash, Ripple and more. Now, we have so many cryptocurrencies that we often wonder which ones are actually legal and which are not.
The problem with cryptocurrencies is that they do not have a regulation system. In fact, crypto tokens are not made to regulate. This is why it is usually difficult for the governments (or countries) to legalize these currencies.
While many countries have not shown a positive attitude towards cryptocurrencies, there are a number of countries where the use and trading of these currencies are illegal. Let’s find out which these countries are and which crypto-coins are legalized by which countries.
Cryptocurrency Legality by Country
Being one of the fastest developing technology markets in the world, Japan had to legalize cryptocurrencies sooner or later. The country’s government has set up a specific PSA (Payment Services Act) based framework which allows some cryptocurrencies and a number of exchanges to be used for payment and trading purposes. Japan is now widely considered a hub for cryptocurrency trading/exchange in Asia.
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2. United States
The US government, in 2013, accepted bitcoin as a decentralized virtual currency that can be used for performing transactions. It was classified as a commodity by CFTC in September 2015.
Bitcoin is also taxable as a property. To sum up, bitcoin is legal in the USA, however, there is no clarification about the legalization of other cryptocurrencies.
Germany is one of the few European countries that not only allow cryptocurrencies but are also actively involved in the development of blockchain solutions.
Germany has completely legalized bitcoin allowing citizens to transact and trade in this coin. The recognition of Bitcoin by the German government has also improved the value of these coins in the worldwide market.
By issuing a regulation note on 11 July 2014, the country has legalized the operation of virtual currencies such as bitcoin, along with cryptocurrency exchanges, taxation and provided authority to those who are involved in the trading and use of such currencies.
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Malta has added its name to the long list of countries that are finally accepting bitcoin and other cryptocurrencies as a legal mode for digital transactions.
The cabinet of Malta recently approved the bills regarding the regulation of cryptocurrency and ICOs in the country, which officially makes it a fully fledged crypto-legal country.
In August 2017, the Canadian government accepted Impak Coin as its first legalized cryptocurrency. The Quebec regulation authority had previously legalized bitcoin for some limited business models including ATMs and exchanges.
However, the Bank of Montreal and some other Canadian states do not allow their customers to use their bank cards for performing cryptocurrency transactions.
Effecting from March 28, 2019, cryptocurrencies will be legalized in Belarus, as per a recent order by the government.
In addition to the leading crypto-coins, many exchanges, ICOs, and smart contracts will also be legal in the country. The step was taken with the aim to enforce the development of a digital economy. As per the news, crypto activities will be completely tax-free.
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It is one of the countries which has shown a positive attitude towards bitcoin and other virtual currencies. There is a special region, called “Bitcoin City” in Holland where all bitcoin transactions including retail purchases, trading and business are completely legal.
However, the Holland government has not yet regulated or officially legalized the use of any cryptocurrency.
The trading and purchase of cryptocurrencies are legal in Vietnam, however, the government of Vietnam doesn’t allow its citizens to use any virtual currency as a payment tool.
That means creating new cryptocurrencies and launching ICOs in Vietnam is completely legal and so is the trading of cryptocurrency at popular exchanges. The government is also reportedly working on legalizing bitcoin as a method of payment by 2018 end.
The use and trading of bitcoin and other popular virtual currencies are legal in Singapore, but the government doesn’t control the operations or price of these currencies. Cryptocurrencies, by nature, are supposed to be unregulated.
Therefore, it shouldn’t be a problem for merchants and consumers in Singapore to freely use cryptocurrencies. The use of bitcoin in Singapore is taxable in some cases.
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The bank of Thailand had legalized the use of bitcoin in the country in 2017. The exchange and trading of digital currencies are allowed provided that proper care is taken. Only licensed bitcoin exchanges in Thailand are allowed to exchange cryptocurrencies for Thai Baht.
However, the central bank of Thailand doesn’t allow its users and associated financial institutions to participate in any kind of cryptocurrency related business.
The Indian government has somewhat been neutral about the use or trading of cryptocurrencies including bitcoin. The Reserve Bank of India (RBI) does not allow the sale or purchase of cryptocurrency, and the government doesn’t recognize any virtual currency or related transaction.
But that hasn’t stopped people in India from using or investing in cryptocurrencies. In fact, there are many launching and running in the country successfully.
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In an announcement made in November 2016, the Federal Tax Service of Russia declared bitcoins as “not illegal”. Even though it doesn’t say that bitcoins or any other Cryptocurrency Is Legal & Illegal in the country, people are allowed to purchase, sale or trade in virtual currencies at their own risk.
The government doesn’t regulate, support or control the exchange of cryptocurrencies but these are not prohibited from operating.
Apart from the ones mentioned above, below are the lists of the countries that support (or do not support) cryptocurrencies.
Cryptocurrency is legal in the following countries
- South Africa
- Canada (banned by banks)
- United States
- Costa Rica
- Trinidad and Tobago
- Saudi Arabia
- India (banned by banks)
- Hong Kong
- South Korea
- Thailand (banned by banks)
- Vietnam (not allowed as a payment tool)
- Czech Republic
- United Kingdom
- New Zealand
- Bosnia and Herzegovina
The legalization of cryptocurrencies doesn’t necessarily mean that the government of the particular country supports or promotes virtual currencies in any way.
Following Countries Have Declared Cryptocurrencies as illegal
As you can, most countries around the world have started accepting cryptocurrency for various purposes. If you are planning to start a business in this field, this is a perfect time.
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SAG IPL is a professional IT service provider company with 10+ years of experience in creating and managing ICOs and cryptocurrency projects for clients worldwide.