The answer to “is Bitcoin legal?” is: yes. Despite rumors, warnings and even attempts over the years, no jurisdiction has ever prosecuted anyone merely for using bitcoin.
Most advanced economies accept that bitcoin is innovative and here to stay. Many encourage open development of bitcoin, blockchain and cryptocurrency applications. Some take a cautious approach, regulating how bitcoin companies can operate and interface with the traditional financial world.
Some Important Points to Remember
Neither China nor Russia has ever “banned Bitcoin.” China has, at various points in the past, regulated bitcoin exchanges’ access to regular bank accounts, halted withdrawals, or cautioned on speculative investments. However, China today continues to play a large role in bitcoin mining, trading and development. Certain Russian officials have spoken about banning Bitcoin altogether in the past, though the country’s own Ministry of Finance does not support such actions.
Bitcoin, like any other valuable asset, is usually subject to local taxation and anti money-laundering laws. Some jurisdictions, like the U.S. and Australia, expect users to track the value and usage of all their bitcoins. Other jurisdictions have no bitcoin-specific regulation at all.
In the U.S., bitcoin-using businesses are also subject to local state laws governing money services and money transmission. New York State also provides a special “BitLicense” with high barriers to entry, subjecting local companies to similar regulations as larger financial institutions. In April 2017, Japan also enacted similar laws subjecting bitcoin exchanges to the same provisions as other financial institutions. However Japan also recognized bitcoin as a legal form of payment.
Some jurisdictions, such as Singapore, are experimenting with “sandbox” laws for blockchain and general fintech companies. These laws permit financial experimentation but severely restrict the number of customers each can serve.
The law is always changing. If you hear some breaking news from your country, let us know.
Now that you know more about Bitcoin’s legal status, you may have even more questions, such as:
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