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Why Is Bitcoin Legal

There are no regulations for the use of Bitcoins. [3]: Chile The Financial Markets Authority (FMA) has warned investors that cryptocurrencies are risky and that the FMA does not monitor or regulate virtual currencies, including Bitcoin, or cryptocurrency trading platforms. [14]: 30-31 Absolute prohibition. [14] The use of any cryptocurrency is illegal in Nepal. [91] Banks are not allowed to trade bitcoins due to concerns about financial crime and hacking. In addition, cryptocurrency is banned at Qatar Financial Centre. [75] [76] VAT/GST and other taxes (e.g. income tax) continue to apply to transactions using bitcoin for goods and services. [3]: European Union While only the Swiss Confederation can designate something as legal tender, the city will allow all payments to authorities in all three cryptocurrencies by October, encouraging local businesses to accept them as well. “Eventually, in practice, you will be able to live most of your experience in Lugano in these three cryptocurrencies,” says Pietro Poretti, director of the city`s economic development department. Financial institutions are not allowed by the central bank to facilitate Bitcoin transactions. [14] In April 2018, the Central Bank of the Islamic Republic of Iran issued a statement banning the country`s banks and financial institutions from handling cryptocurrencies, citing money laundering and terrorist financing risks. [77] On April 1, 2014, the PBOC ordered commercial banks and payment companies to close Bitcoin trading accounts in two weeks.

[98] Following the launch of Bitcoin in El Salvador, efforts to legalize crypto are spreading The Estonian Ministry of Finance has concluded that there are no legal obstacles to the use of Bitcoin-like cryptocurrencies as a payment method. Merchants must therefore identify the buyer when entering into a business relationship or if the buyer buys more than 1,000 euros of currency in a month. [169] The Norwegian government stated in February 2017 that it would not charge VAT on buying or selling Bitcoin. [180] The Japanese government declared Bitcoin legal tender as of 2016 and requires crypto exchanges to comply with AML and KYC guidelines. This decision is the result of years of government research following the Mount Gox incident. Financial institutions are not allowed to facilitate Bitcoin transactions. [14] Regulators have warned the public that Bitcoin does not enjoy legal protection “because the currency is not issued by any monetary authority and therefore is not entitled to any legal claims or conversion guarantees.” [109] The UK`s Financial Conduct Authority (FCA) is positive about Bitcoin, although the asset is not legal tender. From 2020, the asset will be considered real estate in the UK, meaning it will be subject to capital gains tax. However, as cryptocurrencies are different from a traditional asset class, this tax can vary depending on the parties involved.

Outside the United States, legality and regulations vary widely. In September 2021, El Salvador became the first country to officially declare bitcoin legal tender – the government even gave each bitcoin a value of around $30 to get things started. At the other end of the spectrum, some countries ban Bitcoin and other cryptos altogether. Bitcoin was legal in Mexico as of 2017, with plans to regulate it as a virtual asset through FinTech law. [38] The use of Bitcoin in Poland is currently not regulated by a legal act. [3]: Poland The US Treasury Department classified Bitcoin as a convertible decentralized virtual currency in 2013. [33] The Commodity Futures Trading Commission, CFTC, classified Bitcoin as a commodity in September 2015. According to the Internal Revenue Service (IRS), Bitcoin is taxed as property. [34] Crypto is not legal tender in Georgia, but there are currently no regulations from the National Bank of Georgia that prevent it from being used in the form of barter. [152] The UK`s Financial Conduct Authority (FCA) considers Bitcoin a “commodity” and therefore plans to regulate it. However, he indicated that he would intervene to monitor derivatives related to Bitcoin.