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Is Bitcoin legal after all? Check out these rules of some countries

Is Bitcoin legal after all? Check out these rules of some countries

Bitcoin is a digital currency created in 2008, during a major bank crisis of credibility. It is operated in a decentralized manner, that is, without being controlled by entities or governments. Even with more than 10 years of existence, some people still have doubts if Bitcoin is actually legal.

When speaking of cryptocurrencies, one of the main factors is a security. It is guaranteed, above all, thanks to blockchain, which is a virtual and immutable block network. Technically it  is a great book of records in a decentralized network, which avoids hacking threats.

Despite its guaranteed security, the legality and extent of Bitcoin is different, depending on the country in question. If you want to know more about asset trading rules like Bitcoin, read on!

In this text we will discuss:

  1. Where Bitcoin is legalized
  2. What is Bitcoin’s situation in Brazil
  3. The difference between regulation and legalization

 

Where is Bitcoin legalized?

Cryptocurrencies like Bitcoin are growing in popularity all over the world. As its market capitalization expands, regulators debate their regulation in the digital marketplace.

The legality of Bitcoin and cryptocurrenciess in general is a very controversial subject since most countries have already rejected it as a legitimate currency because it is a decentralized cryptocurrency.

Traditionally, currencies are created by the government and supported by banks and other financial institutions. However, there is no regulatory body for cryptocurrencies. Currently Bitcoin is legal in some countries, and in others the subject is still under discussion.

The following are some Bitcoin regulations for some countries:

Germany

Bitcoin is regarded as private money in Germany, allowing users of this cryptocurrency to continue using it without any interference from the government. Moreover, this gives the authorities the opportunity to apply rates on the profits of companies that use the digital currency.

Australia

At first, the Australian people were subject to taxes on goods and services when making purchases with Bitcoin. In some cases consumers could still be taxed twice: once when buying cryptocurrency and another when using it in exchange for goods and services subject to that tax. An action has now been made that has paved the way for more investors in the country. This prompted the Australian government to provide a legislative end to this double taxation of Bitcoin and other digital currencies

Bulgaria

Bulgaria was the first country in the European Union to officially recognize Bitcoin as currency, unlike others who treated it as a gold-like commodity.

Canada

In Canada, Bitcoin is still classified as an intangible asset. It is expected to be regulated by laws aimed at reducing problems such as money laundering and terrorism.

China

The People’s Bank of China prevented all financial institutions in the country from conducting any transaction related to Bitcoin in 2013. This includes the pricing, purchase and sale of Bitcoins. However, Bitcoin is legal for individuals wishing to trade it.

Slovenia

According to the Slovenian Ministry of Finance, Bitcoin is not considered as neither a currency nor an asset. In this country there is no tax on cryptocurrency operations. Moreover, the mining of Bitcoins and the businesses that offer goods and services for this digital currency are taxed.

France

The French Ministry of Economy and Finance stated in 2014 that Bitcoin is legal and has established regulations for financial institutions and users who use digital coins. Among these, Bitcoin distributors are required to place a certain limit on users’ level of anonymity by identifying and verifying them.

Also, a limit of 5000 euros was set for the population to develop business with Bitcoin without having to pay taxes

Sweden

Sweden’s jurisdiction is one of the most favorable when it comes to accepting Bitcoin and other cryptographic assets. The Swedish Financial Supervisory Authority has publicly declared digital coins as a legitimate form of payment. The country’s tax authority has still decided to tax Bitcoin mining, according to how successful it is.

The exchanges have an obligation to submit an application for a license to operate the cryptocurrency in addition to complying with regulations for traditional financial service providers, such as anti-money laundering policies

Is Bitcoin legal in Brazil?

Currently, Bitcoin is not yet officially legalized in Brazil, but that does not make it illegal. The chamber made a specific commission to discuss the regulation of cryptocurrencies. You can trade them freely from person to person but be aware, as it is necessary to declare this asset in the income tax.

Therefore, the cryptocurrencies are not yet regulated in Brazil, although they are subject to taxes and declaration in the Income Tax. The Brazilian government has issued some warnings about the concern with cryptocurrencies such as Bitcoin, which included problems of market volatility, security and fraud.

In 2014, the IRS made an announcement saying that the government does not have Bitcoin as its currency. Because of this, capital gains taxes would be levied on all Cryptocurrencies.

What is the difference between regulation and legalization?

It is not because Bitcoin is not regulated in Brazil, or in other countries, that it is illegal. Currently, the Brazilian government allows transactions with digital currencies. And even imposes taxes on the profits of the sale of Bitcoins by declaring them in the Income Tax.

However, there are no specific laws that define exactly what is allowed or not in this market.

There are countries that see Bitcoin as an asset (such as stocks or derivatives). Others as currency, or as property (such as the commercialization of goods).

As you can see, when it comes to whether Bitcoin is legal, there are still many disagreements over the legalization and regulation of crypto. Before negotiating it, check out the rules and taxes to which you may be subject!

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