Established in 2009, Bitcoin was the first cryptocurrency and has quickly grown to be the most valued and most invested. It started as an uncontrolled and regulated currency, but recently, enforcement agencies, tax authorities, and regulators are looking for ways to regulate and control its trading and transactions.
With its growing popularity, some countries have considered it a legal means of transaction, and some companies have even started accepting payment in Bitcoin. Whether you can use Bitcoin depends on where you are because some regions and countries have not embraced it as others have.
One of the main reasons many governments are concerned about the use of Bitcoin in their countries is the anonymity of the transactions and how hard it is to track them. The library of Congress usually conducts reviews of different countries’ stands on cryptocurrency and Bitcoin.
In November 2021, they found 103 countries whose governments gave financial regulatory agencies directions to develop priorities and regulations for financial institutions concerning cryptocurrencies and their utility in AML/CFT.
It also identified that the following countries allow people to use Bitcoin.
Since 2013, the United States Financial Crimes Enforcement Network has been giving guidance about Bitcoin. The US treasury has described Bitcoin as a convertible currency that people can use in place of the US dollar.
They have classified all entities that exchange or administer Bitcoin as money service businesses. The government requires that they register with the treasury, file transaction reports above $10,000, and are subject to the Bank Secrecy Act.
FinCEN is also establishing regulations for non-financial and financial institutions to develop crypto reporting and tracking priorities. The regulations require institutions like crypto exchanges and banks to report suspicious activities and certain transactions, allowing immediate investigation.
The European Union
The EU identifies cryptocurrencies as crypto-asses, making it legal to trade and use Bitcoin. However, the currency regulatory within the EU has announced that any activities involving crypto-assets are not in their control.
The European Commission in 2020 endorsed a proposal for legislation to regulate all cryptocurrencies. The legislation intends to level the financial ground across the union and ensure the public can safely access and use crypto-assets.
The Canada Revenue Agency views Bitcoin as a commodity for income tax, meaning that they consider any income people get from using Bitcoin as business income. Like the US, they consider crypto exchanges as money service businesses, which means they are under the purview of the Terrorist Financing Act and Proceeds of Crime.
They also have to report any suspicious activities, keep certain records, follow compliance plans and have a Financial transactions ad Reports Analysis Center of Canada registration.
The Australian Taxation Office views Bitcoin as a financial asset with a taxable value under specific events. When Australians sell, exchange, trade, gift, use Bitcoin in transactions, or change it to fiat currency, they trigger capital gains tax.
The taxation office also requires Australians to record all transactions they make using Bitcoin for taxation.
This is the first and only country to declare Bitcoin as a legal tender after President Nayib Bukele received approval from Congress to adopt it as a form of payment. Other countries like France, Denmark, Germany, Iceland, Spain, Mexico, the United Kingdom, and Japan also consider Bitcoin transactions legal and have developed regulations around its use and trade.
China and Egypt are among the countries that have made it illegal for people to use Bitcoin. If you are in a country where it’s legal to use Bitcoin and want to trade to keep up with price changes, https://www.okx.com/markets/prices is a perfect site for experienced traders and beginners.