When it comes to cryptocurrency, the question of legality is never too far away from our thoughts. Is virtual currency legal? Will you be convicted if found with Bitcoin or any other digital currency? Well, going by the legality status of virtual currency around the world, the chances of you ending up in jail are very slim. Here is a list of countries that have legalized cryptocurrency.
1. United States
In 2013, the Financial Crimes Enforcement Network, a component of the US Treasury Department, made it clear that Bitcoin and other cryptocurrencies aren’t illegal. The agency stated that consumers may use these virtual currencies to buy goods and services.
It’s not illegal to have digital currencies in Canada. However, the country does not consider these cryptocurrencies legal tender. That means traders or service providers are not compelled by the law to accept them as an alternative means of payment.
Russia as a country has tough and stringent laws on every sector with the finance sector being no exception. It begs the question; is cryptocurrency legal in the former soviet union state? The answer is YES, and as a matter of fact, Moscow recently updated its existing cryptocurrency laws expected to take effect in 2021.
As of 2020, German financial institutions are allowed to manage digital currencies for their clients. That means clients are at liberty to open bank accounts for Bitcoin and other cryptocurrencies of their choice. That follows Berlin’s recent adoption of Europe’s anti-money laundering amendments into national law.
What’s the state of digital currency legality in Japan? Well, things are quite favorable for virtual currency enthusiasts out there. In other words, the use of Cryptocurrencies is very legal in this technologically-inclined nation.
By the way, Tokyo is pushing for the establishment of an international network for cryptocurrency payments, which works similarly to SWIFT(the network system used by banks to curb money laundering). According to a privy source who recently spoke to Reuters, the Asian nation hopes to have the network in place within the next few years.
6. Hong Kong
In April 2020, the Bloomberg financial magazine reported Hong Kong’s first approval of a cryptocurrency fund involving Venture Smart Asia Ltd. The entity has rolled out for investors who would like to acquire Bitcoin with the blessings of Hong Kong. You can check this out if you would like to hold some Bitcoins with a trusted Bitcoin vendor in the top Chinese city.
7. South Korea
Following years of deliberation, the National Assembly of South Korea National Assembly finally passed a law that regulates the cryptocurrency business. Under this law, virtual currency service providers will be required to use a particular verification system and comply with reporting guidelines of the global cryptocurrency standards developed by the Financial Action Task Force (FATF).
8. United Kingdom
Just like Russia, the United Kingdom allows the use of digital currencies but not as items of legal tender. Before you begin dealing in Bitcoin exchanges, for instance, make sure you are familiar with the registration requirements set by the U.K’s Financial Conduct Authority(FCA).
9. New Zealand
Bitcoin, Ethereum, and all other mainstream virtual currencies are legal in New Zealand. At the moment, the country doesn’t have any particular laws governing cryptocurrencies. To back the legality of virtual currency, the Financial Markets Authority(FMA) states that different activities related to digital currencies could be considered financial services, subject to the “fair dealing” guidelines in the Financial Markets Conduct Act 2013.
In 2017, the government of Australia made the legality of cryptocurrencies clear. That was after it declared that Bitcoin and other similar cryptocurrencies should be treated as property, and subjected to Capital Gains Tax (CGT).
Other Countries that Have Legalized Cryptocurrency
- South Africa
- Costa Rica
- Trinidad and Tobago
- Saudi Arabia
- Hong Kong
- Czech Republic
- Bosnia and Herzegovina
There are 195 countries in the world. Out of these countries, seventy have confirmed their position on cryptocurrency. In other words, these countries allow the use of digital currency. Plus, there are many more countries that have no problem with virtual currency even though they have never come clean on this subject.