February 21st, 2018
As time passes, Bitcoin is becoming more popular, and people from different places are concerned about this new currency system. It is understandable to have questions regarding the legality of Bitcoin. Bitcoin currency is a brand new paradigm that is completely different from traditional fiat currency. Slowly, with time, Bitcoin is making news all over the world because of its soaring price in the global market. The question surrounding the relationship between the law and Bitcoin depends on how this digital currency is used.
A Worrying Factor
Regulators around the world are concerned about Bitcoin’s decentralized and anonymity nature. In different countries, authorities fear that this platform can be easily used for the purchase of illicit goods and money laundering without being traced. Not helping this digital currency’s reputation was its prevalence for the Silk Road, a marketplace where users can purchase illegal goods. But it is important to notice that using Bitcoin for illegal activities doesn’t make this new currency illegal. The illegality of the activity is the main concern, whether it is paid in cash, Bitcoin, or gold. Bitcoin is used for legitimate purposes, but its rules are a bit complex.
The Legality of Bitcoin
Bitcoin is in circulation in different places around the world; in every country, the legality of Bitcoin is viewed differently. Slowly with time Bitcoin is making its way to the mainstream market, and for the most part it remains safe to use. However, there are few instances where it is tied to illicit purchases or activities. Several countries have issued a statement indicating digital currencies are not regulated and don’t exist as sanction currency. Such statements can put users at risk, but that doesn’t mean they are violating any laws. However, there are nations where Bitcoin is illegal, for instance, Iceland and Bangladesh.
The legality of Bitcoin depends on the place where you are using it. Bitcoin legality depends on where and how you are going to utilize Bitcoin; it is always important to remain up to date on all latest regulations related to digital currency. Laws change across governing bodies and borders, questions of Bitcoin legality will continue to be raised.
Bitcoin Legality in Different Countries
The market capitalization of digital currency is shooting up, regulators from around the world are stepping up on the debate on its use and legality. Bitcoin is one popular digital currency which is getting a huge response from different sections of the market. In many countries, this digital currency is proving to be an effective alternative to traditional currencies. Seeing the demand, many online exchanges and BTM kiosks are installed for easy access of digital currencies. On the other hand, some countries have gone to the extent of declaring Bitcoin illegal. However, it is important to understand that because something isn’t legal tender doesn’t mean you can’t use it for payments. This means there are no protections for either the merchant or the consumer, its use as payment is discretionary.
Jurisdictions in many places are still mulling over what steps need to be taken. Approaches vary from place to place. Smaller nations are creating doubts on digital currency legality whereas larger institutions believe cryptocurrencies are not mature enough for any kind of regulation. There are different opinions and approaches taken by authorities regarding Bitcoin legality.
There are many countries where there is no clear answer regarding Bitcoin legality. Should financial regulators keep an eye on cryptocurrencies, or should that be left to Central Banks? In some countries, it is legal and used like traditional currency, but few developed nations have legalized cryptocurrencies.
Another divisive issue about Bitcoin is whether or not it should be regulated on an international or national basis? Many countries are pushing for the G20, an international forum for central banks and governments to discuss establishing parameters related to Bitcoin in a coming summit.