Is Bitcoin legal? The short answer is most likely yes — but it depends on where you are and what you do with it.
The debate surrounding the legality of Bitcoin and cryptocurrencies is picking up. More lawmakers talk about it now, with the spread of digital currencies. Usually, people are allowed to trade with the legal tender in their country, but not create money themselves.
Bitcoin, with its miners and verification system, introduces a problem for lawmakers. Given that Bitcoin is a currency separate from the national money, Bitcoin mining is technically not counterfeiting.
Bitcoin isn’t counterfeit, as it’s not trying to pass off as another currency. Still, lack of proper regulation still makes Bitcoin somewhat of a grey area. Trying to fit Bitcoin trading into the box of currency legislation has not always been successful.
Given that Bitcoin is still in its infancy, relatively speaking, the laws are bound to change. We do know some of the rules and regulations, however, and will continue to update this article as different countries progress in their legislation.
Is using Bitcoin illegal?
Whether or not Bitcoin is legal depends on what it is being used for. The Silk Road was a marketplace on the Dark Web where people could purchase illegal goods for Bitcoin while remaining completely anonymous. However, this could be done and is done, using fiat currency. Spending your Bitcoins on legal products and services is perfectly legal in the US. At least for now, according to U.S. Treasury Department’s Financial Crimes Enforcement Network.
Is mining Bitcoin legal?
It’s legal to own and run a Bitcoin mining rig in most places. However, consider if it’s financially viable where you live). Certain countries have laws that may restrict your ability to trade. You might have to check what you can do with the yields on exchanges for fiat money. Furthermore, Bitcoin mining might be a problem if you’re sharing your energy bill with other people. If they aren’t aware of your mining activities, then they might be surprised when the bill arrives.
Is Bitcoin taxable?
The IRS in the US sees Bitcoin and other tokens as taxable property like bonds and stocks. The laws differ from country to country. A good rule of thumb is always to pay taxes on your profits. If you’re earning money from trading or mining, then it is considered a taxable income or capital gains in most countries.
Countries where Bitcoin is illegal
- Saudi Arabia
Countries where Bitcoin is legal
- Australia New Zealand
- Bosnia and Herzegovina
- Costa Rica
- Czech Republic
- Hong Kong
- South Africa
- South Korea
- Trinidad and Tobago
- United Kingdom
- United States of America
Countries where Bitcoin is restricted
- Canada (banking ban)
- India (banking ban)
- Jordan (banking ban)
- Thailand (banking ban)
- United Arab Emirates (contradictory information)
- Vietnam (legal to hold but illegal as payment)