Cryptocurrency

The cryptocurrency market is often compared to a black hole for its unpredictable spikes and falls. Fortunately, over the past few years, the industry has seen an unprecedented level of improvement in cryptocurrency prices, especially; Bitcoin is at the frontline of the sudden surge. But this has left analysts and investors mesmerized and worried about a possible trap. Owing to its irregularities, countries across the globe have divided views on the cryptocurrency market. In this article, IndustryWired has listed countries where cryptocurrency is legal and where it is not.

The first thing that comes to our mind when we talk about cryptocurrency is Bitcoin. Ever since the peer-to-peer digital currency made its debut in 2006, the importance of the cryptocurrency market has spiked. Although Bitcoin ran into trouble once or twice, the currency can’t be wiped from the digital market space. But the debate over the legality of cryptocurrency across the globe is never-ending. Tax authorities, enforcement agencies, regulators, etc are resisting the compliance and the way bitcoin is circulated in the digital form. They are not issued, endorsed, or regulated by any national or international body. Instead, they are mined through a computer-generated process. Henceforth, not many countries are very fond of it. Besides, speculating stories of US$800 investment turning to US$8,000 just in a week have sparked people from poor countries to invest in crypto-currency and wait for its value to rise. To combat the emerging challenges around the cryptocurrency sphere, many countries have banned the usage.

Countries that said aye to cryptocurrency

European Union

The European Union is quite relaxed about its people’s investment in the cryptocurrency market. Cryptocurrencies, especially, Bitcoins, are legal throughout the continent. Even though the body didn’t pass clear legislation about Bitcoin’s status as a currency, it has pointed that VAT/GST does not apply in the conversion of conventional currency to Bitcoin. However, transactions involving Bitcoin for any services across the continent will be subjected to VAT/GST and other taxes. The European Union has provided ‘qualified for instruments (QFI)’ status to cryptocurrencies, allowing banks, credit unions, and investment companies to own crypto assets and gain financial benefits from them.

South Korea

The South Korean government has legalized the investment in cryptocurrencies. They have implemented a rule that allows trades in cryptocurrencies to operate only from real-name bank accounts from 2018. The country went a step ahead and asked cryptocurrency dealers to have a contract with banks concerning crypto-currency trades. Before allowing investments, the bank examines dealers’ management and cybersecurity systems before signing such contracts.

United States

The United States has legalized the usage of cryptocurrency but constantly works towards preventing or reducing illegal transactions. Some of the significant organizations like Dish Network (DISH), the Microsoft Store, sandwich retailer Subway, and Oversock.com also welcome Bitcoin payments. Despite its buffer space, the US Department of Treasury’s Financial Crimes Enforcement Network (FinCEN) has issued guidance on Bitcoin. Even though the treasury has accepted Bitcoin as a Money Services Business (MSB), they did not recognize it as a currency.

Countries that said Nay to cryptocurrency

China

China has completely banned the usage of cryptocurrency inside the country. Even banks and other financial institutions are prohibited from transacting or dealing with bitcoins. However, China’s central bank, the People’s Bank of China (PBOC) has been conducting a study of digital currency for over the past three years and has even set up an Institute of Digital Money within the PBOC. 

Russia

The use of bitcoin or any other form of cryptocurrency is illegal in Russia. Unfortunately, it is not keenly regulated. A draft law on digital financial assets was published by the Ministry of Finances in 2018 and introduced the State Duma. Under the bill, mining is treated as an entrepreneurial activity subject to taxation if the miner exceeds the energy consumption limits established by the government.

Country at the neutral stage

India

India is neither for nor against cryptocurrency investment for now. But the Indian government is not taking bitcoins very positively. Reserve Bank of India has banned the usage of cryptocurrency in 2018. The RBI prohibited banks from processing transactions related to crypto currency, but in 2020, the Supreme Court lifted the ban. As of 2021, the Indian government is seriously reviewing an imminent ban on digital currency.