Bitcoin allows its users to make anonymous payments to one another from anywhere in the world. Because of this, countries now have new currency concerns.
Some lawmakers and officials may be skeptical of its usage due to the lack of oversight and the potential for corruption, but others have adopted rules under their country’s anti-money laundering and countering the financing of terrorism legislation (AML/CFT) to curb its abuse.
When it comes to countries using a cryptocurrency like Bitcoin, the LOC performs regular examinations of how different nations treat them. It found that 103 nations had ordered their financial regulatory bodies to create policies and priorities for financial institutions pertaining to cryptocurrencies and their usage in anti-money-laundering and counter-financing-of-terrorism by the end of 2021.
Grapherex has compiled below a list of countries where Bitcoin is legal.
Since 2013, the U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN) has issued guidance on Bitcoin. The Treasury has recognised Bitcoin as a currency that can be exchanged for or converted into fiat currency.
Money services businesses include cryptocurrency exchanges and payment processors because they deal with the administration and trading of Bitcoin (MSB). In accordance with the Bank Secrecy Act, a Money Services Business (MSB) must register with the U.S. Treasury and report Bitcoin acquisitions above $10,000.
Also, FinCEN is working on laws for both financial and non-financial institutions to create national priorities for Bitcoin tracking and reporting. Banks and cryptocurrency exchanges, among others, will be subject to reporting requirements under these rules. They can use the information to look into possible cryptocurrency-related financial crimes and other illegal acts.
The European Union
Bitcoin and other cryptocurrencies are now considered crypto-assets within the European Union. Bitcoin use is not banned in the European Union (EU), but the EU’s currency regulator, the European Banking Authority, has warned both individuals and companies about the hazards associated with Bitcoin despite the fact that it has no jurisdiction over crypto-asset activity.
The European Commission completed legislation Bitcoin to regulate crypto-assets in 2020, and it has been supported by several institutions within the union. The goal of this law is to provide a fair playing field in the financial sector across the European Union by harmonising the various regulatory frameworks now in place. The commission’s other goal is to make crypto widely available and user-friendly.
The United States and Canada share a similar attitude towards the use Bitcoin. The Canadian Revenue Agency (CRA) treats Bitcoin like any other commodity for calculating personal income tax. Bitcoin transactions are treated as company revenue or capital gains and hence must be reported as such.
Exchanges for digital currency are classified as “money service businesses” in Canada. Because of this, they are subject to Canada’s Anti-Money Laundering and Countering the Financing of Terrorism Act. The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) requires Bitcoin exchanges to register with them, report suspicious transactions, follow compliance strategies, and even preserve certain records.
The Australian Taxation Office shares the Canadian government’s view that Bitcoin is a valuable financial asset subject to taxation in certain circumstances. A capital gains tax is triggered if Bitcoin is used for transactions or exchanged for another cryptocurrency or fiat cash. For legal and tax reasons, you should maintain track of all Bitcoin transactions.
It’s possible to avoid paying tax on profits made from Bitcoin in Australia if you only use them for personal purposes.
Aside from El Salvador, no other country recognises Bitcoin as legal cash. Bitcoin was officially adopted as a method of payment by President Nayib Bukele and the government in June 2021.
Bitcoin Is Accepted and Legal in These Other Countries
Multiple additional nations have adopted some type of Bitcoin regulation and now permit its usage in transactions. A few examples that Grapherex found are listed below.
- United Kingdom