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- Insights
- Cryptocurrencies
- Stocks
- White Papers
- Industry
- Geography
Bitcoin is one of the first and the most widely talked about cryptocurrencies across the world. However, owing to regulations Bitcoin remains restricted in many countries as it is considered too risky and volatile.
Since El Salvador announced last week to make Bitcoin into its mainstream financial systems, other countries are also preparing a blueprint to include Bitcoin in their financial strategy. In this article, let us discuss the countries where Bitcoin is recognized as a legal cryptocurrency.
The United States has always been optimistic about bitcoin and the U.S. Department of Treasury's Financial Crimes Enforcement Network (FinCEN) has been issuing guidance on bitcoin since 2013. Additionally, bitcoin is categorized as property for taxation purposes by the Internal Revenue Service. However, several government agencies are working to prevent the use of bitcoin for illegal transactions.
Canada has always maintained a positive approach towards bitcoin and has already recognized it as a commodity by the Canada Revenue Agency. The agency considers Bitcoin transactions as barter transactions, and the income generated as business income. Additionally, Canada considers bitcoin exchanges as a service. However, this also brings it under the radar of the anti-money laundering (AML) laws.
Australia has declared bitcoin legal similar to the US and Canada. However, the buyers are required to follow the Anti-Money Laundering and Counter-Terrorism Financing Act. Moreover, bitcoin and other cryptocurrencies are also subject to the Capital Gains Tax.
In, 2015, the European Court of Justice (ECJ) announced that buying and selling digital currencies in the EU is considered under the supply of services and made it exempt from value-added tax (VAT). Moreover, some EU countries such as Finland, Belgium, UK, and Bulgaria have also developed their own initiatives to facilitate Bitcoin trading.
El Salvador becomes the first country in the world to allow bitcoin as legal tender. In June 2021, the country's Congress approved a proposal to formally adopt bitcoin as a form of payment making it completely legal.
