Legality of bitcoin by country or territory

Legality of bitcoin by country or territory

The legal status of bitcoin varies substantially from country to country and is still undefined or switching in many of them. Whilst the majority of countries do not make the usage of bitcoin itself illegal (with the exceptions of: Bangladesh, Bolivia, Ecuador & Kyrgyzstan), its status as money (or a commodity) varies, with differing regulatory implications. While some countries have explicitly permitted its use and trade, others have banned or restricted it. Likewise, various government agencies, departments, and courts have classified bitcoins differently. While this article provides the legal status of bitcoin, regulations and bans that apply to this cryptocurrency likely extend to similar systems as well.

Contents

The European Union has passed no specific legislation relative to the status of the bitcoin as a currency, but has stated that VAT/GST is not applicable to the conversion inbetween traditional (fiat) currency and bitcoin.

VAT/GST and other taxes (such as income tax) still apply to transactions made using bitcoins for goods and services. [1] :European Union

In October 2015, the Court of Justice of the European Union ruled that “The exchange of traditional currencies for units of the ‘bitcoin’ virtual currency is exempt from VAT” and that “Member States must exempt, inter alia, transactions relating to ‘currency, bank notes and coins used as legal tender’”, making bitcoin a currency as opposed to being a commodity. [Two] [Trio] According to judges, the tax shouldn’t be charged because bitcoins should be treated as a means of payment. [Four]

According to the European Central Bank, traditional financial sector regulation is not applicable to bitcoin because it does not involve traditional financial actors. [Five] :Five Others in the EU have stated, however, that existing rules can be extended to include bitcoin and bitcoin companies. [6]

The European Central Bank classifies bitcoin as a convertible decentralized virtual currency. [Five] :6 In July two thousand fourteen the European Banking Authority advised European banks not to deal in virtual currencies such as bitcoin until a regulatory regime was in place. [7]

In two thousand sixteen the European Parliament’s proposal to set up a taskforce to monitor virtual currencies to combat money laundering and terrorism, passed by five hundred forty two votes to 51, with eleven abstentions, has been sent to the European Commission for consideration. [8] The European Commission also notably introduced a “parallel” proposal aimed at preventing tax evasion technics as exposed in the Panama Papers. [9] In two thousand seventeen it was exposed that the proposal will require cryptocurrency exchanges and cryptocurrency wallets to identify suspicious activity. [Ten]

In two thousand thirteen the G7’s Financial Act Task Force issued the following statement in guidelines which may be applicable to companies involved in transmitting bitcoin and other currencies, “Internet-based payment services that permit third party funding from anonymous sources may face an enhanced risk of [money laundering/terrorist financing].” They concluded that this may “pose challenges to countries in [anti-money laundering/counter terrorist financing] regulation and supervision”. [11]

Alphabetical index to classifications Edit

Africa Edit

Northern Africa Edit

Western Africa Edit

As of seventeen January 2017, The Central Bank of Nigeria (CBN) has passed a circular to inform all Nigerian banks that bank transactions in bitcoin and other virtual currencies have been banned in Nigeria. [12]

However, during the year, the CBN (through its Deputy Director on Banking and Payments System, Musa Itopa-Jimoh) clarified the circular and its stance on bitcoin, citing that a lot of people misinterpret the central bank’s latest warning. It noted that “Central bank cannot control or regulate bitcoin. Central bank cannot control or regulate blockchain. Just the same way no one is going to control or regulate the Internet. We don’t own it”. [13]

Later on, a committee was set up by the Central Bank of Nigeria (CBN) and the Nigeria Deposit Insurance Corporation (NDIC) to look into the possibility of the country adopting the technology driving Bitcoin and other digital currencies – blockchain. The committee has submitted its report but “several sub-committees are still working on the issue” according to the Director, Banking & Payments System Department at CBN, Mr. ‘Dipo Fatokun. [14]

Central Africa Edit

Southeast Africa Edit

Horn of Africa Edit

Indian Ocean States Edit

Southern Africa Edit

In December two thousand fourteen the Reserve Bank of South Africa issued a position paper on Virtual Currencies whereby it proclaimed that virtual currency had ‘no legal status or regulatory framework’. [15]

The Reserve Bank Of Zimbabwe is sceptical about bitcoin and has not officially permitted its use. On five April two thousand seventeen however, BitMari, a Pan-African Blockchain platform got licensed, through its banking fucking partner, AgriBank, to operate in the country. [16]

Americas Edit

North America Edit

Bitcoin would seem to be classified pursuant to the current provisions of the PPSA simply as an “intangible”. [17]

Bitcoin is expected to be regulated under anti-money laundering and counter-terrorist financing laws in Canada, based on a federal budget bill (C-31), passed in two thousand fourteen [Legitimate] . Regulations must be enacted before this provision becomes active [Nineteen] [20] , however, once they are it is expected that “dealers in digital currency” will be regulated as money services businesses [21] . The Authorite des Marches Financiers, the regulator in the province of Quebec, has proclaimed that some bitcoin related business models including exchanges and ATMs are regulated under its current MSB Act [22] .

The U.S. Treasury classified bitcoin as a convertible decentralized virtual currency in 2013. [23] The Commodity Futures Trading Commission, CFTC, classified bitcoin as a commodity in September 2015. Per IRS, bitcoin is taxed as a property. [24]

In September 2016, a federal judge ruled that “Bitcoins are funds within the plain meaning of that term”. [25]

Bitcoin is legal in Mexico as of 2017. It is to be regulated by the Fintech Law. [26]

Central America Edit

News reports indicate that bitcoins are being used in the country. [1] :Nicaragua

Caribbean Edit

South America Edit

Bitcoins may be considered money, but not legal currency. A bitcoin may be considered either a good or a thing under the Argentina’s Civil Code, and transactions with bitcoins may be governed by the rules for the sale of goods under the Civil Code. [1] :Argentina .

The Central Bank of Bolivia issued a resolution banning bitcoin in 2014. [27]

Not regulated, according to a two thousand fourteen statement by the Central Bank of Brazil concerning cryptocurrencies. [28]

There is no regulation on the use of bitcoins. [1] :Chile

A twenty six March two thousand fourteen by Superintendencia Financiera de Colombia states that the use of bitcoin is not regulated. [29]

The Ecuadorian government has issued a ban on bitcoin and other digital currencies. [30]

The National Assembly of Ecuador banned bitcoins including other decentralized digital/crypto currencies, due to the establishment of a fresh state-run electronic money system. Ecuador’s fresh project would be managed by the government and tied directly to the local currency—the dollar. Users will be able to pay for select services and send money inbetween individuals. This was slated to begin in mid-February 2015. “Electronic money is designed to operate and support the monetary scheme of dollarization,” economist Diego Martinez, a delegate of the President of the Republic to the Board of Regulation and Monetary and Financial Policy. [31]

Asia Edit

Central Asia Edit

In a July 2014, statement of the National Bank of the Kyrgyz Republic made clear that “the use of ‘virtual currency’, bitcoins, in particular, as a means of payment in the Kyrgyz Republic will be a disturbance of the law of our state.” [32]

Eurasia Edit

The use of bitcoins is not regulated in Cyprus. [1] :Cyprus

Western Asia Edit

As of 2017, the Israel Tax Authorities issued a statement telling that bitcoin and other cryptocurrencies would not fall under the legal definition of currency, and neither of that of the a financial security, but of a taxable asset. [33] Each time a bitcoin is sold, the seller would have to pay a capital gains tax of 25%. Miners, traders of bitcoins would be treated as businesses and would have to pay corporate income tax as well as charge a 17% VAT. [34]

Concurrency/Bitcoin is not banned by any governmental party in Saudi Arabia. Only Saudi Arabian Monetary Authority (sama) have warned from using it as it is high risk and recognized in SA and its dealers will not be ensured any protection or rights. [35] [ need quotation to verify ]

The government of Jordan has issued a warning discouraging the use of bitcoin and other similar systems. [36]

The Central Bank of Jordan prohibits banks, currency exchanges, financial companies, and payment service companies from dealing in bitcoins or other digital currencies. [37] While it warned the public of risks of bitcoins, and that they are not legal tender, bitcoins are still accepted by petite businesses and merchants. [37]

The government of Lebanon has issued a warning discouraging the use of bitcoin and other similar systems. [36]

Southern Asia Edit

In September 2014, Bangladesh Bank said that “anybody caught using the virtual currency could be jailed under the country’s rigorous anti-money laundering laws”. [38]

On twenty eight December 2013, the Deputy Governor of the Reserve Bank of India, K. C. Chakrabarty, made a statement that the Reserve Bank of India had no plans to regulate bitcoin. [39] [40]

As of May 25, 2017, the State Bank Of Pakistan does not recognise digital currencies. FBR (Federal Board of Revenue) is investigating the traders of digital currencies for tax evasion and money laundering. The trade of bitcoin is presently not regulated by laws. [41]

Eastern Asia Edit

While private parties can hold and trade bitcoins in China, regulation prohibits financial firms like banks from doing the same. [6] :China

On five December 2013, People’s Bank of China (PBOC) made its very first step in regulating bitcoin by prohibiting financial institutions from treating bitcoin transactions. [42] In a statement on the central bank’s website the PBOC said financial institutions and payment companies cannot give pricing in, buy and sell bitcoin or insure bitcoin-linked products.

On sixteen December two thousand thirteen it was speculated that the PBOC had issued a fresh ban on third-party payment processors from doing business with bitcoin exchanges, [43] however a statement from BTC China suggests this isn’t accurate, and rather payment processors had voluntarily withdrawn their services. [44]

On one April two thousand fourteen PBOC ordered commercial banks and payment companies to close bitcoin trading accounts in two weeks. [45] Trading bitcoins by individuals is legal in China. [42] [46]

On nine February 2017, numerous bitcoin exchanges in China delay or pause bitcoin withdraw service, with or without announcement. Some of the announcements, [47] [48] [49] [50] if not all, claim that regulation activities have been or are to be taken. News resources [51] also demonstrate that, albeit such activities were carried out by PBOC, they were not done via legal approaches, but by “appointment” instead. None of the exchanges introduced or have claimed to receive any lawful paperwork.

On eight January 2014, the Secretary for Financial Services and the Treasury addressed bitcoin in the Legislative Council stating that “Hong Kong at present has no legislation directly regulating bitcoins and other virtual currencies of [a] similar kind. However, our existing laws (such as the Organised and Serious Crimes Ordinance) provide sanctions against unlawful acts involving bitcoins, such as fraud or money laundering.” [1] :Hong Kong

On sixteen November 2013, Norman Chan, the chief executive of Hong Kong Monetary Authority (HKMA) said that bitcoins is only a virtual commodity. He also determined that bitcoins will not be regulated by HKMA. However, the authority will be closely watching the usage of bitcoins locally and its development overseas. [52]

Japan officially recognizes bitcoin and digital currencies as money. [53]

On seven March 2014, the Japanese government, in response to a series of questions asked in the National Diet, made a cabinet decision on the legal treatment of bitcoins in the form of answers to the questions. [54] The decision did not see bitcoin as currency nor bond under the current Banking Act and Financial Instruments and Exchange Law, prohibiting banks and securities companies from dealing in bitcoins. The decision also acknowledges that there are no laws to unconditionally prohibit individuals or legal entities from receiving bitcoins in exchange for goods or services. Taxes may be applicable to bitcoins.

According to Nikkei Asian Review, in February 2016, “Japanese financial regulators have proposed treating virtual currencies as methods of payment equivalent to conventional currencies”. [55]

The city of Hirosaki is officially accepting bitcoin donations with the aim of attracting international tourists and financing local projects. [56] [57] In 2017, the country’s government officially recognized bitcoin as a method of payment. [58] [59]

While not illegal in the country, Korean authorities will prosecute illegal activity involving bitcoin [60] and have indicted at least one individual for purchasing drugs with bitcoin. [61]

There are no laws in South Korea regulating the use of bitcoin at present. [1] :South Korea On December 12, 2013, the president of the Bank of Korea recommended at a press conference that bitcoin be regulated in the future. [62]

Bitcoin ATMs are banned here [6] :Taiwan but bitcoins can be purchased at over six thousand convenience store kiosks. [63] [64]

Regulators have warned the public that bitcoin does not have legal protection, “as the currency is not issued by any monetary authority and is therefore not entitled to legal claims or assure of conversion”. [65]

While bitcoin is not illegal in Taiwan, financial institutions have been warned by regulators that necessary regulatory deeds may be taken if they use it.. [1] :Taiwan

On six December 2013, Perng Fai-nan said that bitcoin is only used in certain communities. Besides, he also opined that the value of bitcoin is a bubble and is very volatile. Therefore, he advised the public against the speculation of bitcoins to prevent making a loss during the process. The central bank is closely watching the development of bitcoin and plan to impose regulations in the future. [66]

On thirty one December 2013, Financial Supervisory Commission (Republic of China) (FSC) and CBC issued a joint statement which warns against the use of bitcoins. It is stated that bitcoins remains very volatile, very speculative, and is not entitled to legal claims or assure of conversion. [67]

On five January 2014, FSC chairman Tseng Ming-chung stated that FSC will not permit the installation of bitcoin ATM in Taiwan because bitcoin is not a currency and it should not be accepted by individuals and banks as payment. [68]

However, despite this, three of the four major convenience store chains in Taiwan make available purchases of bitcoin through their kiosk systems, [Sixty nine] and the largest chain now permits bitcoin to be used for purchases of goods. [70]

Southeast Asia Edit

Presently Bank Indonesia does not have detailed policies of regulating or banning bitcoins usage. [71] [72]

No official statement regarding the Bank Negara Malaysia’s views of the bitcoin system was located. [1] :Malaysia

On four November 2013, Bank Negara Malaysia (BNM) met with local bitcoin proponents to learn more about the currency but did not comment at the time. [73] BNM issued a statement on six January two thousand fourteen that bitcoin is not recognised as a legal tender in Malaysia. The central bank will not regulate bitcoin operations at the moment and users should aware of the risks associated with bitcoin usage. [74] [75]

On six March 2014, Bangko Sentral ng Pilipinas (BSP) issued a statement on risks associated with bitcoin trading and usage. Recently virtual currencies were legalized and cryptocurrency exchanges are now regulated by Central Bank of the Philippines (Bangko Sentral ng Pilipinas) under Circular nine hundred forty four [76]

In December 2013, the Monetary Authority of Singapore reportedly stated that “[w]hether or not businesses accept bitcoins in exchange for their goods and services is a commercial decision in which MAS does not intervene.” [1] :Singapore

On September 22, 2013, the Monetary Authority of Singapore (MAS) warned users of the risks associated with using bitcoin stating “If bitcoin ceases to operate, there may not be an identifiable party responsible for refunding their monies or for them to seek recourse” [77] and in December two thousand thirteen stated “Whether or not businesses accept bitcoins in exchange for their goods and services is a commercial decision in which MAS does not intervene” [78] In January 2014, the Inland Revenue Authority of Singapore issued a series of tax guidelines according to which bitcoin transactions may be treated as a barter exchange if it is used as a payment method for real goods and services. Businesses that deal with bitcoin currency exchanges will be taxed based on their bitcoin sales. [79]

Bank of Thailand proclaimed bitcoin illegal in 2013, but some bitcoin companies have been able to obtain business licenses. [80] One startup denied a business license was reportedly told that “buying and selling bitcoins, using bitcoins to buy or sell goods and services, and transferring bitcoins in and out of Thailand were all presently illegal.” [81]

Bank of Thailand suggested that bitcoin is not illegal but warned against its use in 2016. [82]

Trading in bitcoin in Vietnam is still unrestricted and unregulated by law, and two largest bitcoin markets in Vietnam – VBTC and Bitcoin Vietnam are working without being restricted. In December 2016, the government confirmed to develop legal framework for bitcoin in Vietnam that should be finished by December 2017. [83]

Europe Edit

Central Europe Edit

On six December 2013, the Croatian National Bank reportedly conducted a discussion on the circulation of digital currencies and concluded that the bitcoin is not illegal in Croatia. [1] :Croatia

Bitcoin trading does not require authorization by the Czech National Bank and the Czech National Bank cannot grant such an authorization (2015). [84]

On nineteen August 2013, the German Finance Ministry announced that bitcoin is now essentially a “unit of account” and can be used for the purpose of tax and trading in the country, meaning that purchases made with it must pay VAT as with Euro transactions. It is not classified as a foreign currency or e–money but stands as “private money” which can be used in “multilateral clearing circles”, according to the ministry. [85] [86]

The use of the bitcoin in Poland is not regulated by a legal act at present. [1] :Poland

Szymon Woźniak of the Ministry of Finance made an official announcement on the legality of bitcoin on eighteen December two thousand thirteen at a conference at the Warsaw School of Economics stating that the Ministry of Finance does not consider bitcoin illegal and does not want to hinder its development. [87] He clarified that while not illegal, bitcoin cannot be considered legal tender, and, in the light of the directives of the European Union, it is neither electronic money. [87] As of January 27, two thousand fifteen several banks have closed accounts of clients trading bitcoin, and indicated “presumption of criminal offense” as the cause, with “criminal offense” presumably being “cryptocurrency trade”. [88] As of July 7, two thousand seventeen the National Bank of Poland (NBP) and Financial Supervision Authority (KNF) issued a comment on virtual “currencies”. [89] They underlined that virtual currencies (including bitcoin): (1) are not issued or ensured by the central bank, (Two) are not money, i.e. they are neither legal tender nor currency, (Trio) can not be used to pay tax liabilities, (Four) do not meet the criterion of universal acceptability in shopping and service points ,(Five) are not electronic money, (6) are not payment services (in legal terms), (7) are not financial instruments (in legal terms). They added that trading virtual currencies in Poland does not crack national or EU law, however, having virtual “currencies”, involves many risks: (1) risk related to the possibility of loss of funds due to theft, (Two) risk related to lack of ensure, (Trio) risk of lack of universal acceptability, (Four) risk related to the possibility of fraud, (Five) risk of high price switch. Because of these risks, the NBP and KNF warn against buying virtual currencies and investing in them. The NBP and KNF recognize that the purchase, possession and sale of virtual currencies by entities supervised by the KNF (e.g. banks) would be burdened with high risk and would not ensure a stable and prudent management of the financial institution. Financial institutions should be cautious about engaging and cooperating with virtual currency “trading” entities.

As of March 2015, an official statement of the Romanian National Bank mentioned that “using digital currencies as payment has certain risks for the financial system”. [90]

The National Bank of Slovakia (NBS), stated [91] that bitcoin does not have the legal attributes of a currency, and therefore does not fall under national control. [note 1] European legislation, including the Slovak law, does not define the activities associated with virtual currency. Such activities are not regulated and supervised by the National Bank of Slovakia or the European Central Bank. At the same time NBS points out that any legal person or natural person in the Slovak Republic shall not issue any notes or any other coins. Unlawful manufacturing of banknotes and coins and putting them into circulation is punishable by law. In this context, NBS points out that virtual currencies have not a physical counterpart in the form of legal tender and participation in such a scheme (virtual currency) is at your own risk. Exchanges or purchases of virtual currencies represent the business risk of investors and investors’ money are not protected. For any compensation of losses caused by such exchanges or purchases there is no legal entitlement.

On December 23, two thousand thirteen the Slovenian Ministry of Finance made an announcement [92] stating that bitcoin is neither a currency nor an asset. There is no capital gains tax chargeable on bitcoin, however bitcoin mining is taxed and businesses selling goods/services in bitcoin are also taxed.

Bitcoin businesses in Switzerland are subject to anti-money laundering regulations and in some instances may need to obtain a banking license. [93]

On five December two thousand thirteen a proposal was put forward by forty five members of the Swiss Parliament for digital sustainability (Pardigli), that calls on the Swiss government to evaluate the opportunities for utilization of bitcoin by the country’s financial sector. [94] It also seeks clarification on bitcoin’s legal standing with respect to VAT, securities and anti-money laundering laws. [95]

In response to the parliament postulates, the Swiss Federal Council issued a report on virtual currencies in June 2014. [96] The report states that since virtual currencies are not in a legal vacuum, the Federal Council has concluded that there is no need for legislative measures to be taken at the moment.

In 2016, Zug added bitcoin as a means of paying city fees, in a test and an attempt to advance Zug as a region that is advancing future technologies. [97] Swiss Federal Railways, government-owned railway company of Switzerland, sells bitcoins at its ticket machines. [98]

Legality of bitcoin by country or territory

Legality of bitcoin by country or territory

The legal status of bitcoin varies substantially from country to country and is still undefined or switching in many of them. Whilst the majority of countries do not make the usage of bitcoin itself illegal (with the exceptions of: Bangladesh, Bolivia, Ecuador & Kyrgyzstan), its status as money (or a commodity) varies, with differing regulatory implications. While some countries have explicitly permitted its use and trade, others have banned or restricted it. Likewise, various government agencies, departments, and courts have classified bitcoins differently. While this article provides the legal status of bitcoin, regulations and bans that apply to this cryptocurrency likely extend to similar systems as well.

Contents

The European Union has passed no specific legislation relative to the status of the bitcoin as a currency, but has stated that VAT/GST is not applicable to the conversion inbetween traditional (fiat) currency and bitcoin.

VAT/GST and other taxes (such as income tax) still apply to transactions made using bitcoins for goods and services. [1] :European Union

In October 2015, the Court of Justice of the European Union ruled that “The exchange of traditional currencies for units of the ‘bitcoin’ virtual currency is exempt from VAT” and that “Member States must exempt, inter alia, transactions relating to ‘currency, bank notes and coins used as legal tender’”, making bitcoin a currency as opposed to being a commodity. [Two] [Three] According to judges, the tax shouldn’t be charged because bitcoins should be treated as a means of payment. [Four]

According to the European Central Bank, traditional financial sector regulation is not applicable to bitcoin because it does not involve traditional financial actors. [Five] :Five Others in the EU have stated, however, that existing rules can be extended to include bitcoin and bitcoin companies. [6]

The European Central Bank classifies bitcoin as a convertible decentralized virtual currency. [Five] :6 In July two thousand fourteen the European Banking Authority advised European banks not to deal in virtual currencies such as bitcoin until a regulatory regime was in place. [7]

In two thousand sixteen the European Parliament’s proposal to set up a taskforce to monitor virtual currencies to combat money laundering and terrorism, passed by five hundred forty two votes to 51, with eleven abstentions, has been sent to the European Commission for consideration. [8] The European Commission also notably introduced a “parallel” proposal aimed at preventing tax evasion technologies as exposed in the Panama Papers. [9] In two thousand seventeen it was exposed that the proposal will require cryptocurrency exchanges and cryptocurrency wallets to identify suspicious activity. [Ten]

In two thousand thirteen the G7’s Financial Activity Task Force issued the following statement in guidelines which may be applicable to companies involved in transmitting bitcoin and other currencies, “Internet-based payment services that permit third party funding from anonymous sources may face an enlargened risk of [money laundering/terrorist financing].” They concluded that this may “pose challenges to countries in [anti-money laundering/counter terrorist financing] regulation and supervision”. [11]

Alphabetical index to classifications Edit

Africa Edit

Northern Africa Edit

Western Africa Edit

As of seventeen January 2017, The Central Bank of Nigeria (CBN) has passed a circular to inform all Nigerian banks that bank transactions in bitcoin and other virtual currencies have been banned in Nigeria. [12]

However, during the year, the CBN (through its Deputy Director on Banking and Payments System, Musa Itopa-Jimoh) clarified the circular and its stance on bitcoin, citing that a lot of people misinterpret the central bank’s latest warning. It noted that “Central bank cannot control or regulate bitcoin. Central bank cannot control or regulate blockchain. Just the same way no one is going to control or regulate the Internet. We don’t own it”. [13]

Later on, a committee was set up by the Central Bank of Nigeria (CBN) and the Nigeria Deposit Insurance Corporation (NDIC) to look into the possibility of the country adopting the technology driving Bitcoin and other digital currencies – blockchain. The committee has submitted its report but “several sub-committees are still working on the issue” according to the Director, Banking & Payments System Department at CBN, Mr. ‘Dipo Fatokun. [14]

Central Africa Edit

Southeast Africa Edit

Horn of Africa Edit

Indian Ocean States Edit

Southern Africa Edit

In December two thousand fourteen the Reserve Bank of South Africa issued a position paper on Virtual Currencies whereby it announced that virtual currency had ‘no legal status or regulatory framework’. [15]

The Reserve Bank Of Zimbabwe is sceptical about bitcoin and has not officially permitted its use. On five April two thousand seventeen however, BitMari, a Pan-African Blockchain platform got licensed, through its banking fucking partner, AgriBank, to operate in the country. [16]

Americas Edit

North America Edit

Bitcoin would seem to be classified pursuant to the current provisions of the PPSA simply as an “intangible”. [17]

Bitcoin is expected to be regulated under anti-money laundering and counter-terrorist financing laws in Canada, based on a federal budget bill (C-31), passed in two thousand fourteen [Eighteen] . Regulations must be enacted before this provision becomes active [Nineteen] [20] , however, once they are it is expected that “dealers in digital currency” will be regulated as money services businesses [21] . The Authorite des Marches Financiers, the regulator in the province of Quebec, has proclaimed that some bitcoin related business models including exchanges and ATMs are regulated under its current MSB Act [22] .

The U.S. Treasury classified bitcoin as a convertible decentralized virtual currency in 2013. [23] The Commodity Futures Trading Commission, CFTC, classified bitcoin as a commodity in September 2015. Per IRS, bitcoin is taxed as a property. [24]

In September 2016, a federal judge ruled that “Bitcoins are funds within the plain meaning of that term”. [25]

Bitcoin is legal in Mexico as of 2017. It is to be regulated by the Fintech Law. [26]

Central America Edit

News reports indicate that bitcoins are being used in the country. [1] :Nicaragua

Caribbean Edit

South America Edit

Bitcoins may be considered money, but not legal currency. A bitcoin may be considered either a good or a thing under the Argentina’s Civil Code, and transactions with bitcoins may be governed by the rules for the sale of goods under the Civil Code. [1] :Argentina .

The Central Bank of Bolivia issued a resolution banning bitcoin in 2014. [27]

Not regulated, according to a two thousand fourteen statement by the Central Bank of Brazil concerning cryptocurrencies. [28]

There is no regulation on the use of bitcoins. [1] :Chile

A twenty six March two thousand fourteen by Superintendencia Financiera de Colombia states that the use of bitcoin is not regulated. [29]

The Ecuadorian government has issued a ban on bitcoin and other digital currencies. [30]

The National Assembly of Ecuador banned bitcoins including other decentralized digital/crypto currencies, due to the establishment of a fresh state-run electronic money system. Ecuador’s fresh project would be managed by the government and tied directly to the local currency—the dollar. Users will be able to pay for select services and send money inbetween individuals. This was slated to begin in mid-February 2015. “Electronic money is designed to operate and support the monetary scheme of dollarization,” economist Diego Martinez, a delegate of the President of the Republic to the Board of Regulation and Monetary and Financial Policy. [31]

Asia Edit

Central Asia Edit

In a July 2014, statement of the National Bank of the Kyrgyz Republic made clear that “the use of ‘virtual currency’, bitcoins, in particular, as a means of payment in the Kyrgyz Republic will be a disturbance of the law of our state.” [32]

Eurasia Edit

The use of bitcoins is not regulated in Cyprus. [1] :Cyprus

Western Asia Edit

As of 2017, the Israel Tax Authorities issued a statement telling that bitcoin and other cryptocurrencies would not fall under the legal definition of currency, and neither of that of the a financial security, but of a taxable asset. [33] Each time a bitcoin is sold, the seller would have to pay a capital gains tax of 25%. Miners, traders of bitcoins would be treated as businesses and would have to pay corporate income tax as well as charge a 17% VAT. [34]

Concurrency/Bitcoin is not banned by any governmental party in Saudi Arabia. Only Saudi Arabian Monetary Authority (sama) have warned from using it as it is high risk and recognized in SA and its dealers will not be ensured any protection or rights. [35] [ need quotation to verify ]

The government of Jordan has issued a warning discouraging the use of bitcoin and other similar systems. [36]

The Central Bank of Jordan prohibits banks, currency exchanges, financial companies, and payment service companies from dealing in bitcoins or other digital currencies. [37] While it warned the public of risks of bitcoins, and that they are not legal tender, bitcoins are still accepted by petite businesses and merchants. [37]

The government of Lebanon has issued a warning discouraging the use of bitcoin and other similar systems. [36]

Southern Asia Edit

In September 2014, Bangladesh Bank said that “anybody caught using the virtual currency could be jailed under the country’s rigorous anti-money laundering laws”. [38]

On twenty eight December 2013, the Deputy Governor of the Reserve Bank of India, K. C. Chakrabarty, made a statement that the Reserve Bank of India had no plans to regulate bitcoin. [39] [40]

As of May 25, 2017, the State Bank Of Pakistan does not recognise digital currencies. FBR (Federal Board of Revenue) is investigating the traders of digital currencies for tax evasion and money laundering. The trade of bitcoin is presently not regulated by laws. [41]

Eastern Asia Edit

While private parties can hold and trade bitcoins in China, regulation prohibits financial firms like banks from doing the same. [6] :China

On five December 2013, People’s Bank of China (PBOC) made its very first step in regulating bitcoin by prohibiting financial institutions from treating bitcoin transactions. [42] In a statement on the central bank’s website the PBOC said financial institutions and payment companies cannot give pricing in, buy and sell bitcoin or insure bitcoin-linked products.

On sixteen December two thousand thirteen it was speculated that the PBOC had issued a fresh ban on third-party payment processors from doing business with bitcoin exchanges, [43] however a statement from BTC China suggests this isn’t accurate, and rather payment processors had voluntarily withdrawn their services. [44]

On one April two thousand fourteen PBOC ordered commercial banks and payment companies to close bitcoin trading accounts in two weeks. [45] Trading bitcoins by individuals is legal in China. [42] [46]

On nine February 2017, numerous bitcoin exchanges in China delay or pause bitcoin withdraw service, with or without announcement. Some of the announcements, [47] [48] [49] [50] if not all, claim that regulation activities have been or are to be taken. News resources [51] also display that, albeit such activities were carried out by PBOC, they were not done via legal approaches, but by “appointment” instead. None of the exchanges introduced or have claimed to receive any lawful paperwork.

On eight January 2014, the Secretary for Financial Services and the Treasury addressed bitcoin in the Legislative Council stating that “Hong Kong at present has no legislation directly regulating bitcoins and other virtual currencies of [a] similar kind. However, our existing laws (such as the Organised and Serious Crimes Ordinance) provide sanctions against unlawful acts involving bitcoins, such as fraud or money laundering.” [1] :Hong Kong

On sixteen November 2013, Norman Chan, the chief executive of Hong Kong Monetary Authority (HKMA) said that bitcoins is only a virtual commodity. He also determined that bitcoins will not be regulated by HKMA. However, the authority will be closely watching the usage of bitcoins locally and its development overseas. [52]

Japan officially recognizes bitcoin and digital currencies as money. [53]

On seven March 2014, the Japanese government, in response to a series of questions asked in the National Diet, made a cabinet decision on the legal treatment of bitcoins in the form of answers to the questions. [54] The decision did not see bitcoin as currency nor bond under the current Banking Act and Financial Instruments and Exchange Law, prohibiting banks and securities companies from dealing in bitcoins. The decision also acknowledges that there are no laws to unconditionally prohibit individuals or legal entities from receiving bitcoins in exchange for goods or services. Taxes may be applicable to bitcoins.

According to Nikkei Asian Review, in February 2016, “Japanese financial regulators have proposed treating virtual currencies as methods of payment equivalent to conventional currencies”. [55]

The city of Hirosaki is officially accepting bitcoin donations with the aim of attracting international tourists and financing local projects. [56] [57] In 2017, the country’s government officially recognized bitcoin as a method of payment. [58] [59]

While not illegal in the country, Korean authorities will prosecute illegal activity involving bitcoin [60] and have indicted at least one individual for purchasing drugs with bitcoin. [61]

There are no laws in South Korea regulating the use of bitcoin at present. [1] :South Korea On December 12, 2013, the president of the Bank of Korea recommended at a press conference that bitcoin be regulated in the future. [62]

Bitcoin ATMs are banned here [6] :Taiwan but bitcoins can be purchased at over six thousand convenience store kiosks. [63] [64]

Regulators have warned the public that bitcoin does not have legal protection, “as the currency is not issued by any monetary authority and is therefore not entitled to legal claims or assure of conversion”. [65]

While bitcoin is not illegal in Taiwan, financial institutions have been warned by regulators that necessary regulatory deeds may be taken if they use it.. [1] :Taiwan

On six December 2013, Perng Fai-nan said that bitcoin is only used in certain communities. Besides, he also opined that the value of bitcoin is a bubble and is very volatile. Therefore, he advised the public against the speculation of bitcoins to prevent making a loss during the process. The central bank is closely watching the development of bitcoin and plan to impose regulations in the future. [66]

On thirty one December 2013, Financial Supervisory Commission (Republic of China) (FSC) and CBC issued a joint statement which warns against the use of bitcoins. It is stated that bitcoins remains very volatile, very speculative, and is not entitled to legal claims or assure of conversion. [67]

On five January 2014, FSC chairman Tseng Ming-chung stated that FSC will not permit the installation of bitcoin ATM in Taiwan because bitcoin is not a currency and it should not be accepted by individuals and banks as payment. [68]

However, despite this, three of the four major convenience store chains in Taiwan make available purchases of bitcoin through their kiosk systems, [Sixty-nine] and the largest chain now permits bitcoin to be used for purchases of goods. [70]

Southeast Asia Edit

Presently Bank Indonesia does not have detailed policies of regulating or banning bitcoins usage. [71] [72]

No official statement regarding the Bank Negara Malaysia’s views of the bitcoin system was located. [1] :Malaysia

On four November 2013, Bank Negara Malaysia (BNM) met with local bitcoin proponents to learn more about the currency but did not comment at the time. [73] BNM issued a statement on six January two thousand fourteen that bitcoin is not recognised as a legal tender in Malaysia. The central bank will not regulate bitcoin operations at the moment and users should aware of the risks associated with bitcoin usage. [74] [75]

On six March 2014, Bangko Sentral ng Pilipinas (BSP) issued a statement on risks associated with bitcoin trading and usage. Recently virtual currencies were legalized and cryptocurrency exchanges are now regulated by Central Bank of the Philippines (Bangko Sentral ng Pilipinas) under Circular nine hundred forty four [76]

In December 2013, the Monetary Authority of Singapore reportedly stated that “[w]hether or not businesses accept bitcoins in exchange for their goods and services is a commercial decision in which MAS does not intervene.” [1] :Singapore

On September 22, 2013, the Monetary Authority of Singapore (MAS) warned users of the risks associated with using bitcoin stating “If bitcoin ceases to operate, there may not be an identifiable party responsible for refunding their monies or for them to seek recourse” [77] and in December two thousand thirteen stated “Whether or not businesses accept bitcoins in exchange for their goods and services is a commercial decision in which MAS does not intervene” [78] In January 2014, the Inland Revenue Authority of Singapore issued a series of tax guidelines according to which bitcoin transactions may be treated as a barter exchange if it is used as a payment method for real goods and services. Businesses that deal with bitcoin currency exchanges will be taxed based on their bitcoin sales. [79]

Bank of Thailand proclaimed bitcoin illegal in 2013, but some bitcoin companies have been able to obtain business licenses. [80] One startup denied a business license was reportedly told that “buying and selling bitcoins, using bitcoins to buy or sell goods and services, and transferring bitcoins in and out of Thailand were all presently illegal.” [81]

Bank of Thailand suggested that bitcoin is not illegal but warned against its use in 2016. [82]

Trading in bitcoin in Vietnam is still unrestricted and unregulated by law, and two largest bitcoin markets in Vietnam – VBTC and Bitcoin Vietnam are working without being restricted. In December 2016, the government confirmed to develop legal framework for bitcoin in Vietnam that should be finished by December 2017. [83]

Europe Edit

Central Europe Edit

On six December 2013, the Croatian National Bank reportedly conducted a discussion on the circulation of digital currencies and concluded that the bitcoin is not illegal in Croatia. [1] :Croatia

Bitcoin trading does not require authorization by the Czech National Bank and the Czech National Bank cannot grant such an authorization (2015). [84]

On nineteen August 2013, the German Finance Ministry announced that bitcoin is now essentially a “unit of account” and can be used for the purpose of tax and trading in the country, meaning that purchases made with it must pay VAT as with Euro transactions. It is not classified as a foreign currency or e–money but stands as “private money” which can be used in “multilateral clearing circles”, according to the ministry. [85] [86]

The use of the bitcoin in Poland is not regulated by a legal act at present. [1] :Poland

Szymon Woźniak of the Ministry of Finance made an official announcement on the legality of bitcoin on eighteen December two thousand thirteen at a conference at the Warsaw School of Economics stating that the Ministry of Finance does not consider bitcoin illegal and does not want to hinder its development. [87] He clarified that while not illegal, bitcoin cannot be considered legal tender, and, in the light of the directives of the European Union, it is neither electronic money. [87] As of January 27, two thousand fifteen several banks have closed accounts of clients trading bitcoin, and indicated “presumption of criminal offense” as the cause, with “criminal offense” presumably being “cryptocurrency trade”. [88] As of July 7, two thousand seventeen the National Bank of Poland (NBP) and Financial Supervision Authority (KNF) issued a comment on virtual “currencies”. [89] They underlined that virtual currencies (including bitcoin): (1) are not issued or ensured by the central bank, (Two) are not money, i.e. they are neither legal tender nor currency, (Trio) can not be used to pay tax liabilities, (Four) do not meet the criterion of universal acceptability in shopping and service points ,(Five) are not electronic money, (6) are not payment services (in legal terms), (7) are not financial instruments (in legal terms). They added that trading virtual currencies in Poland does not crack national or EU law, however, having virtual “currencies”, involves many risks: (1) risk related to the possibility of loss of funds due to theft, (Two) risk related to lack of ensure, (Three) risk of lack of universal acceptability, (Four) risk related to the possibility of fraud, (Five) risk of high price switch. Because of these risks, the NBP and KNF warn against buying virtual currencies and investing in them. The NBP and KNF recognize that the purchase, possession and sale of virtual currencies by entities supervised by the KNF (e.g. banks) would be burdened with high risk and would not ensure a stable and prudent management of the financial institution. Financial institutions should be cautious about engaging and cooperating with virtual currency “trading” entities.

As of March 2015, an official statement of the Romanian National Bank mentioned that “using digital currencies as payment has certain risks for the financial system”. [90]

The National Bank of Slovakia (NBS), stated [91] that bitcoin does not have the legal attributes of a currency, and therefore does not fall under national control. [note 1] European legislation, including the Slovak law, does not define the activities associated with virtual currency. Such activities are not regulated and supervised by the National Bank of Slovakia or the European Central Bank. At the same time NBS points out that any legal person or natural person in the Slovak Republic shall not issue any notes or any other coins. Unlawful manufacturing of banknotes and coins and putting them into circulation is punishable by law. In this context, NBS points out that virtual currencies have not a physical counterpart in the form of legal tender and participation in such a scheme (virtual currency) is at your own risk. Exchanges or purchases of virtual currencies represent the business risk of investors and investors’ money are not protected. For any compensation of losses caused by such exchanges or purchases there is no legal entitlement.

On December 23, two thousand thirteen the Slovenian Ministry of Finance made an announcement [92] stating that bitcoin is neither a currency nor an asset. There is no capital gains tax chargeable on bitcoin, however bitcoin mining is taxed and businesses selling goods/services in bitcoin are also taxed.

Bitcoin businesses in Switzerland are subject to anti-money laundering regulations and in some instances may need to obtain a banking license. [93]

On five December two thousand thirteen a proposal was put forward by forty five members of the Swiss Parliament for digital sustainability (Pardigli), that calls on the Swiss government to evaluate the opportunities for utilization of bitcoin by the country’s financial sector. [94] It also seeks clarification on bitcoin’s legal standing with respect to VAT, securities and anti-money laundering laws. [95]

In response to the parliament postulates, the Swiss Federal Council issued a report on virtual currencies in June 2014. [96] The report states that since virtual currencies are not in a legal vacuum, the Federal Council has concluded that there is no need for legislative measures to be taken at the moment.

In 2016, Zug added bitcoin as a means of paying city fees, in a test and an attempt to advance Zug as a region that is advancing future technologies. [97] Swiss Federal Railways, government-owned railway company of Switzerland, sells bitcoins at its ticket machines. [98]

Legality of bitcoin by country or territory

Legality of bitcoin by country or territory

The legal status of bitcoin varies substantially from country to country and is still undefined or switching in many of them. Whilst the majority of countries do not make the usage of bitcoin itself illegal (with the exceptions of: Bangladesh, Bolivia, Ecuador & Kyrgyzstan), its status as money (or a commodity) varies, with differing regulatory implications. While some countries have explicitly permitted its use and trade, others have banned or restricted it. Likewise, various government agencies, departments, and courts have classified bitcoins differently. While this article provides the legal status of bitcoin, regulations and bans that apply to this cryptocurrency likely extend to similar systems as well.

Contents

The European Union has passed no specific legislation relative to the status of the bitcoin as a currency, but has stated that VAT/GST is not applicable to the conversion inbetween traditional (fiat) currency and bitcoin.

VAT/GST and other taxes (such as income tax) still apply to transactions made using bitcoins for goods and services. [1] :European Union

In October 2015, the Court of Justice of the European Union ruled that “The exchange of traditional currencies for units of the ‘bitcoin’ virtual currency is exempt from VAT” and that “Member States must exempt, inter alia, transactions relating to ‘currency, bank notes and coins used as legal tender’”, making bitcoin a currency as opposed to being a commodity. [Two] [Three] According to judges, the tax shouldn’t be charged because bitcoins should be treated as a means of payment. [Four]

According to the European Central Bank, traditional financial sector regulation is not applicable to bitcoin because it does not involve traditional financial actors. [Five] :Five Others in the EU have stated, however, that existing rules can be extended to include bitcoin and bitcoin companies. [6]

The European Central Bank classifies bitcoin as a convertible decentralized virtual currency. [Five] :6 In July two thousand fourteen the European Banking Authority advised European banks not to deal in virtual currencies such as bitcoin until a regulatory regime was in place. [7]

In two thousand sixteen the European Parliament’s proposal to set up a taskforce to monitor virtual currencies to combat money laundering and terrorism, passed by five hundred forty two votes to 51, with eleven abstentions, has been sent to the European Commission for consideration. [8] The European Commission also notably introduced a “parallel” proposal aimed at preventing tax evasion technics as exposed in the Panama Papers. [9] In two thousand seventeen it was exposed that the proposal will require cryptocurrency exchanges and cryptocurrency wallets to identify suspicious activity. [Ten]

In two thousand thirteen the G7’s Financial Activity Task Force issued the following statement in guidelines which may be applicable to companies involved in transmitting bitcoin and other currencies, “Internet-based payment services that permit third party funding from anonymous sources may face an enlargened risk of [money laundering/terrorist financing].” They concluded that this may “pose challenges to countries in [anti-money laundering/counter terrorist financing] regulation and supervision”. [11]

Alphabetical index to classifications Edit

Africa Edit

Northern Africa Edit

Western Africa Edit

As of seventeen January 2017, The Central Bank of Nigeria (CBN) has passed a circular to inform all Nigerian banks that bank transactions in bitcoin and other virtual currencies have been banned in Nigeria. [12]

However, during the year, the CBN (through its Deputy Director on Banking and Payments System, Musa Itopa-Jimoh) clarified the circular and its stance on bitcoin, citing that a lot of people misinterpret the central bank’s latest warning. It noted that “Central bank cannot control or regulate bitcoin. Central bank cannot control or regulate blockchain. Just the same way no one is going to control or regulate the Internet. We don’t own it”. [13]

Later on, a committee was set up by the Central Bank of Nigeria (CBN) and the Nigeria Deposit Insurance Corporation (NDIC) to look into the possibility of the country adopting the technology driving Bitcoin and other digital currencies – blockchain. The committee has submitted its report but “several sub-committees are still working on the issue” according to the Director, Banking & Payments System Department at CBN, Mr. ‘Dipo Fatokun. [14]

Central Africa Edit

Southeast Africa Edit

Horn of Africa Edit

Indian Ocean States Edit

Southern Africa Edit

In December two thousand fourteen the Reserve Bank of South Africa issued a position paper on Virtual Currencies whereby it proclaimed that virtual currency had ‘no legal status or regulatory framework’. [15]

The Reserve Bank Of Zimbabwe is sceptical about bitcoin and has not officially permitted its use. On five April two thousand seventeen however, BitMari, a Pan-African Blockchain platform got licensed, through its banking playmate, AgriBank, to operate in the country. [16]

Americas Edit

North America Edit

Bitcoin would seem to be classified pursuant to the current provisions of the PPSA simply as an “intangible”. [17]

Bitcoin is expected to be regulated under anti-money laundering and counter-terrorist financing laws in Canada, based on a federal budget bill (C-31), passed in two thousand fourteen [Legitimate] . Regulations must be enacted before this provision becomes active [Nineteen] [20] , however, once they are it is expected that “dealers in digital currency” will be regulated as money services businesses [21] . The Authorite des Marches Financiers, the regulator in the province of Quebec, has announced that some bitcoin related business models including exchanges and ATMs are regulated under its current MSB Act [22] .

The U.S. Treasury classified bitcoin as a convertible decentralized virtual currency in 2013. [23] The Commodity Futures Trading Commission, CFTC, classified bitcoin as a commodity in September 2015. Per IRS, bitcoin is taxed as a property. [24]

In September 2016, a federal judge ruled that “Bitcoins are funds within the plain meaning of that term”. [25]

Bitcoin is legal in Mexico as of 2017. It is to be regulated by the Fintech Law. [26]

Central America Edit

News reports indicate that bitcoins are being used in the country. [1] :Nicaragua

Caribbean Edit

South America Edit

Bitcoins may be considered money, but not legal currency. A bitcoin may be considered either a good or a thing under the Argentina’s Civil Code, and transactions with bitcoins may be governed by the rules for the sale of goods under the Civil Code. [1] :Argentina .

The Central Bank of Bolivia issued a resolution banning bitcoin in 2014. [27]

Not regulated, according to a two thousand fourteen statement by the Central Bank of Brazil concerning cryptocurrencies. [28]

There is no regulation on the use of bitcoins. [1] :Chile

A twenty six March two thousand fourteen by Superintendencia Financiera de Colombia states that the use of bitcoin is not regulated. [29]

The Ecuadorian government has issued a ban on bitcoin and other digital currencies. [30]

The National Assembly of Ecuador banned bitcoins including other decentralized digital/crypto currencies, due to the establishment of a fresh state-run electronic money system. Ecuador’s fresh project would be managed by the government and tied directly to the local currency—the dollar. Users will be able to pay for select services and send money inbetween individuals. This was slated to begin in mid-February 2015. “Electronic money is designed to operate and support the monetary scheme of dollarization,” economist Diego Martinez, a delegate of the President of the Republic to the Board of Regulation and Monetary and Financial Policy. [31]

Asia Edit

Central Asia Edit

In a July 2014, statement of the National Bank of the Kyrgyz Republic made clear that “the use of ‘virtual currency’, bitcoins, in particular, as a means of payment in the Kyrgyz Republic will be a disturbance of the law of our state.” [32]

Eurasia Edit

The use of bitcoins is not regulated in Cyprus. [1] :Cyprus

Western Asia Edit

As of 2017, the Israel Tax Authorities issued a statement telling that bitcoin and other cryptocurrencies would not fall under the legal definition of currency, and neither of that of the a financial security, but of a taxable asset. [33] Each time a bitcoin is sold, the seller would have to pay a capital gains tax of 25%. Miners, traders of bitcoins would be treated as businesses and would have to pay corporate income tax as well as charge a 17% VAT. [34]

Concurrency/Bitcoin is not banned by any governmental party in Saudi Arabia. Only Saudi Arabian Monetary Authority (sama) have warned from using it as it is high risk and recognized in SA and its dealers will not be ensured any protection or rights. [35] [ need quotation to verify ]

The government of Jordan has issued a warning discouraging the use of bitcoin and other similar systems. [36]

The Central Bank of Jordan prohibits banks, currency exchanges, financial companies, and payment service companies from dealing in bitcoins or other digital currencies. [37] While it warned the public of risks of bitcoins, and that they are not legal tender, bitcoins are still accepted by petite businesses and merchants. [37]

The government of Lebanon has issued a warning discouraging the use of bitcoin and other similar systems. [36]

Southern Asia Edit

In September 2014, Bangladesh Bank said that “anybody caught using the virtual currency could be jailed under the country’s stringent anti-money laundering laws”. [38]

On twenty eight December 2013, the Deputy Governor of the Reserve Bank of India, K. C. Chakrabarty, made a statement that the Reserve Bank of India had no plans to regulate bitcoin. [39] [40]

As of May 25, 2017, the State Bank Of Pakistan does not recognise digital currencies. FBR (Federal Board of Revenue) is investigating the traders of digital currencies for tax evasion and money laundering. The trade of bitcoin is presently not regulated by laws. [41]

Eastern Asia Edit

While private parties can hold and trade bitcoins in China, regulation prohibits financial firms like banks from doing the same. [6] :China

On five December 2013, People’s Bank of China (PBOC) made its very first step in regulating bitcoin by prohibiting financial institutions from treating bitcoin transactions. [42] In a statement on the central bank’s website the PBOC said financial institutions and payment companies cannot give pricing in, buy and sell bitcoin or insure bitcoin-linked products.

On sixteen December two thousand thirteen it was speculated that the PBOC had issued a fresh ban on third-party payment processors from doing business with bitcoin exchanges, [43] however a statement from BTC China suggests this isn’t accurate, and rather payment processors had voluntarily withdrawn their services. [44]

On one April two thousand fourteen PBOC ordered commercial banks and payment companies to close bitcoin trading accounts in two weeks. [45] Trading bitcoins by individuals is legal in China. [42] [46]

On nine February 2017, numerous bitcoin exchanges in China delay or pause bitcoin withdraw service, with or without announcement. Some of the announcements, [47] [48] [49] [50] if not all, claim that regulation activities have been or are to be taken. News resources [51] also showcase that, albeit such activities were carried out by PBOC, they were not done via legal approaches, but by “appointment” instead. None of the exchanges introduced or have claimed to receive any lawful paperwork.

On eight January 2014, the Secretary for Financial Services and the Treasury addressed bitcoin in the Legislative Council stating that “Hong Kong at present has no legislation directly regulating bitcoins and other virtual currencies of [a] similar kind. However, our existing laws (such as the Organised and Serious Crimes Ordinance) provide sanctions against unlawful acts involving bitcoins, such as fraud or money laundering.” [1] :Hong Kong

On sixteen November 2013, Norman Chan, the chief executive of Hong Kong Monetary Authority (HKMA) said that bitcoins is only a virtual commodity. He also determined that bitcoins will not be regulated by HKMA. However, the authority will be closely watching the usage of bitcoins locally and its development overseas. [52]

Japan officially recognizes bitcoin and digital currencies as money. [53]

On seven March 2014, the Japanese government, in response to a series of questions asked in the National Diet, made a cabinet decision on the legal treatment of bitcoins in the form of answers to the questions. [54] The decision did not see bitcoin as currency nor bond under the current Banking Act and Financial Instruments and Exchange Law, prohibiting banks and securities companies from dealing in bitcoins. The decision also acknowledges that there are no laws to unconditionally prohibit individuals or legal entities from receiving bitcoins in exchange for goods or services. Taxes may be applicable to bitcoins.

According to Nikkei Asian Review, in February 2016, “Japanese financial regulators have proposed treating virtual currencies as methods of payment equivalent to conventional currencies”. [55]

The city of Hirosaki is officially accepting bitcoin donations with the objective of attracting international tourists and financing local projects. [56] [57] In 2017, the country’s government officially recognized bitcoin as a method of payment. [58] [59]

While not illegal in the country, Korean authorities will prosecute illegal activity involving bitcoin [60] and have indicted at least one individual for purchasing drugs with bitcoin. [61]

There are no laws in South Korea regulating the use of bitcoin at present. [1] :South Korea On December 12, 2013, the president of the Bank of Korea recommended at a press conference that bitcoin be regulated in the future. [62]

Bitcoin ATMs are banned here [6] :Taiwan but bitcoins can be purchased at over six thousand convenience store kiosks. [63] [64]

Regulators have warned the public that bitcoin does not have legal protection, “as the currency is not issued by any monetary authority and is therefore not entitled to legal claims or ensure of conversion”. [65]

While bitcoin is not illegal in Taiwan, financial institutions have been warned by regulators that necessary regulatory deeds may be taken if they use it.. [1] :Taiwan

On six December 2013, Perng Fai-nan said that bitcoin is only used in certain communities. Besides, he also opined that the value of bitcoin is a bubble and is very volatile. Therefore, he advised the public against the speculation of bitcoins to prevent making a loss during the process. The central bank is closely watching the development of bitcoin and plan to impose regulations in the future. [66]

On thirty one December 2013, Financial Supervisory Commission (Republic of China) (FSC) and CBC issued a joint statement which warns against the use of bitcoins. It is stated that bitcoins remains very volatile, very speculative, and is not entitled to legal claims or assure of conversion. [67]

On five January 2014, FSC chairman Tseng Ming-chung stated that FSC will not permit the installation of bitcoin ATM in Taiwan because bitcoin is not a currency and it should not be accepted by individuals and banks as payment. [68]

However, despite this, three of the four major convenience store chains in Taiwan make available purchases of bitcoin through their kiosk systems, [Sixty-nine] and the largest chain now permits bitcoin to be used for purchases of goods. [70]

Southeast Asia Edit

Presently Bank Indonesia does not have detailed policies of regulating or banning bitcoins usage. [71] [72]

No official statement regarding the Bank Negara Malaysia’s views of the bitcoin system was located. [1] :Malaysia

On four November 2013, Bank Negara Malaysia (BNM) met with local bitcoin proponents to learn more about the currency but did not comment at the time. [73] BNM issued a statement on six January two thousand fourteen that bitcoin is not recognised as a legal tender in Malaysia. The central bank will not regulate bitcoin operations at the moment and users should aware of the risks associated with bitcoin usage. [74] [75]

On six March 2014, Bangko Sentral ng Pilipinas (BSP) issued a statement on risks associated with bitcoin trading and usage. Recently virtual currencies were legalized and cryptocurrency exchanges are now regulated by Central Bank of the Philippines (Bangko Sentral ng Pilipinas) under Circular nine hundred forty four [76]

In December 2013, the Monetary Authority of Singapore reportedly stated that “[w]hether or not businesses accept bitcoins in exchange for their goods and services is a commercial decision in which MAS does not intervene.” [1] :Singapore

On September 22, 2013, the Monetary Authority of Singapore (MAS) warned users of the risks associated with using bitcoin stating “If bitcoin ceases to operate, there may not be an identifiable party responsible for refunding their monies or for them to seek recourse” [77] and in December two thousand thirteen stated “Whether or not businesses accept bitcoins in exchange for their goods and services is a commercial decision in which MAS does not intervene” [78] In January 2014, the Inland Revenue Authority of Singapore issued a series of tax guidelines according to which bitcoin transactions may be treated as a barter exchange if it is used as a payment method for real goods and services. Businesses that deal with bitcoin currency exchanges will be taxed based on their bitcoin sales. [79]

Bank of Thailand announced bitcoin illegal in 2013, but some bitcoin companies have been able to obtain business licenses. [80] One startup denied a business license was reportedly told that “buying and selling bitcoins, using bitcoins to buy or sell goods and services, and transferring bitcoins in and out of Thailand were all presently illegal.” [81]

Bank of Thailand suggested that bitcoin is not illegal but warned against its use in 2016. [82]

Trading in bitcoin in Vietnam is still unrestricted and unregulated by law, and two largest bitcoin markets in Vietnam – VBTC and Bitcoin Vietnam are working without being restricted. In December 2016, the government confirmed to develop legal framework for bitcoin in Vietnam that should be finished by December 2017. [83]

Europe Edit

Central Europe Edit

On six December 2013, the Croatian National Bank reportedly conducted a discussion on the circulation of digital currencies and concluded that the bitcoin is not illegal in Croatia. [1] :Croatia

Bitcoin trading does not require authorization by the Czech National Bank and the Czech National Bank cannot grant such an authorization (2015). [84]

On nineteen August 2013, the German Finance Ministry announced that bitcoin is now essentially a “unit of account” and can be used for the purpose of tax and trading in the country, meaning that purchases made with it must pay VAT as with Euro transactions. It is not classified as a foreign currency or e–money but stands as “private money” which can be used in “multilateral clearing circles”, according to the ministry. [85] [86]

The use of the bitcoin in Poland is not regulated by a legal act at present. [1] :Poland

Szymon Woźniak of the Ministry of Finance made an official announcement on the legality of bitcoin on eighteen December two thousand thirteen at a conference at the Warsaw School of Economics stating that the Ministry of Finance does not consider bitcoin illegal and does not want to hinder its development. [87] He clarified that while not illegal, bitcoin cannot be considered legal tender, and, in the light of the directives of the European Union, it is neither electronic money. [87] As of January 27, two thousand fifteen several banks have closed accounts of clients trading bitcoin, and indicated “presumption of criminal offense” as the cause, with “criminal offense” presumably being “cryptocurrency trade”. [88] As of July 7, two thousand seventeen the National Bank of Poland (NBP) and Financial Supervision Authority (KNF) issued a comment on virtual “currencies”. [89] They underlined that virtual currencies (including bitcoin): (1) are not issued or ensured by the central bank, (Two) are not money, i.e. they are neither legal tender nor currency, (Three) can not be used to pay tax liabilities, (Four) do not meet the criterion of universal acceptability in shopping and service points ,(Five) are not electronic money, (6) are not payment services (in legal terms), (7) are not financial instruments (in legal terms). They added that trading virtual currencies in Poland does not crack national or EU law, however, having virtual “currencies”, involves many risks: (1) risk related to the possibility of loss of funds due to theft, (Two) risk related to lack of ensure, (Three) risk of lack of universal acceptability, (Four) risk related to the possibility of fraud, (Five) risk of high price switch. Because of these risks, the NBP and KNF warn against buying virtual currencies and investing in them. The NBP and KNF recognize that the purchase, possession and sale of virtual currencies by entities supervised by the KNF (e.g. banks) would be burdened with high risk and would not ensure a stable and prudent management of the financial institution. Financial institutions should be cautious about engaging and cooperating with virtual currency “trading” entities.

As of March 2015, an official statement of the Romanian National Bank mentioned that “using digital currencies as payment has certain risks for the financial system”. [90]

The National Bank of Slovakia (NBS), stated [91] that bitcoin does not have the legal attributes of a currency, and therefore does not fall under national control. [note 1] European legislation, including the Slovak law, does not define the activities associated with virtual currency. Such activities are not regulated and supervised by the National Bank of Slovakia or the European Central Bank. At the same time NBS points out that any legal person or natural person in the Slovak Republic shall not issue any notes or any other coins. Unlawful manufacturing of banknotes and coins and putting them into circulation is punishable by law. In this context, NBS points out that virtual currencies have not a physical counterpart in the form of legal tender and participation in such a scheme (virtual currency) is at your own risk. Exchanges or purchases of virtual currencies represent the business risk of investors and investors’ money are not protected. For any compensation of losses caused by such exchanges or purchases there is no legal entitlement.

On December 23, two thousand thirteen the Slovenian Ministry of Finance made an announcement [92] stating that bitcoin is neither a currency nor an asset. There is no capital gains tax chargeable on bitcoin, however bitcoin mining is taxed and businesses selling goods/services in bitcoin are also taxed.

Bitcoin businesses in Switzerland are subject to anti-money laundering regulations and in some instances may need to obtain a banking license. [93]

On five December two thousand thirteen a proposal was put forward by forty five members of the Swiss Parliament for digital sustainability (Pardigli), that calls on the Swiss government to evaluate the opportunities for utilization of bitcoin by the country’s financial sector. [94] It also seeks clarification on bitcoin’s legal standing with respect to VAT, securities and anti-money laundering laws. [95]

In response to the parliament postulates, the Swiss Federal Council issued a report on virtual currencies in June 2014. [96] The report states that since virtual currencies are not in a legal vacuum, the Federal Council has concluded that there is no need for legislative measures to be taken at the moment.

In 2016, Zug added bitcoin as a means of paying city fees, in a test and an attempt to advance Zug as a region that is advancing future technologies. [97] Swiss Federal Railways, government-owned railway company of Switzerland, sells bitcoins at its ticket machines. [98]

Legality of bitcoin by country or territory

Legality of bitcoin by country or territory

The legal status of bitcoin varies substantially from country to country and is still undefined or switching in many of them. Whilst the majority of countries do not make the usage of bitcoin itself illegal (with the exceptions of: Bangladesh, Bolivia, Ecuador & Kyrgyzstan), its status as money (or a commodity) varies, with differing regulatory implications. While some countries have explicitly permitted its use and trade, others have banned or restricted it. Likewise, various government agencies, departments, and courts have classified bitcoins differently. While this article provides the legal status of bitcoin, regulations and bans that apply to this cryptocurrency likely extend to similar systems as well.

Contents

The European Union has passed no specific legislation relative to the status of the bitcoin as a currency, but has stated that VAT/GST is not applicable to the conversion inbetween traditional (fiat) currency and bitcoin.

VAT/GST and other taxes (such as income tax) still apply to transactions made using bitcoins for goods and services. [1] :European Union

In October 2015, the Court of Justice of the European Union ruled that “The exchange of traditional currencies for units of the ‘bitcoin’ virtual currency is exempt from VAT” and that “Member States must exempt, inter alia, transactions relating to ‘currency, bank notes and coins used as legal tender’”, making bitcoin a currency as opposed to being a commodity. [Two] [Three] According to judges, the tax shouldn’t be charged because bitcoins should be treated as a means of payment. [Four]

According to the European Central Bank, traditional financial sector regulation is not applicable to bitcoin because it does not involve traditional financial actors. [Five] :Five Others in the EU have stated, however, that existing rules can be extended to include bitcoin and bitcoin companies. [6]

The European Central Bank classifies bitcoin as a convertible decentralized virtual currency. [Five] :6 In July two thousand fourteen the European Banking Authority advised European banks not to deal in virtual currencies such as bitcoin until a regulatory regime was in place. [7]

In two thousand sixteen the European Parliament’s proposal to set up a taskforce to monitor virtual currencies to combat money laundering and terrorism, passed by five hundred forty two votes to 51, with eleven abstentions, has been sent to the European Commission for consideration. [8] The European Commission also notably introduced a “parallel” proposal aimed at preventing tax evasion technics as exposed in the Panama Papers. [9] In two thousand seventeen it was exposed that the proposal will require cryptocurrency exchanges and cryptocurrency wallets to identify suspicious activity. [Ten]

In two thousand thirteen the G7’s Financial Act Task Force issued the following statement in guidelines which may be applicable to companies involved in transmitting bitcoin and other currencies, “Internet-based payment services that permit third party funding from anonymous sources may face an enhanced risk of [money laundering/terrorist financing].” They concluded that this may “pose challenges to countries in [anti-money laundering/counter terrorist financing] regulation and supervision”. [11]

Alphabetical index to classifications Edit

Africa Edit

Northern Africa Edit

Western Africa Edit

As of seventeen January 2017, The Central Bank of Nigeria (CBN) has passed a circular to inform all Nigerian banks that bank transactions in bitcoin and other virtual currencies have been banned in Nigeria. [12]

However, during the year, the CBN (through its Deputy Director on Banking and Payments System, Musa Itopa-Jimoh) clarified the circular and its stance on bitcoin, citing that a lot of people misinterpret the central bank’s latest warning. It noted that “Central bank cannot control or regulate bitcoin. Central bank cannot control or regulate blockchain. Just the same way no one is going to control or regulate the Internet. We don’t own it”. [13]

Later on, a committee was set up by the Central Bank of Nigeria (CBN) and the Nigeria Deposit Insurance Corporation (NDIC) to look into the possibility of the country adopting the technology driving Bitcoin and other digital currencies – blockchain. The committee has submitted its report but “several sub-committees are still working on the issue” according to the Director, Banking & Payments System Department at CBN, Mr. ‘Dipo Fatokun. [14]

Central Africa Edit

Southeast Africa Edit

Horn of Africa Edit

Indian Ocean States Edit

Southern Africa Edit

In December two thousand fourteen the Reserve Bank of South Africa issued a position paper on Virtual Currencies whereby it announced that virtual currency had ‘no legal status or regulatory framework’. [15]

The Reserve Bank Of Zimbabwe is sceptical about bitcoin and has not officially permitted its use. On five April two thousand seventeen however, BitMari, a Pan-African Blockchain platform got licensed, through its banking playmate, AgriBank, to operate in the country. [16]

Americas Edit

North America Edit

Bitcoin would seem to be classified pursuant to the current provisions of the PPSA simply as an “intangible”. [17]

Bitcoin is expected to be regulated under anti-money laundering and counter-terrorist financing laws in Canada, based on a federal budget bill (C-31), passed in two thousand fourteen [Legitimate] . Regulations must be enacted before this provision becomes active [Nineteen] [20] , however, once they are it is expected that “dealers in digital currency” will be regulated as money services businesses [21] . The Authorite des Marches Financiers, the regulator in the province of Quebec, has proclaimed that some bitcoin related business models including exchanges and ATMs are regulated under its current MSB Act [22] .

The U.S. Treasury classified bitcoin as a convertible decentralized virtual currency in 2013. [23] The Commodity Futures Trading Commission, CFTC, classified bitcoin as a commodity in September 2015. Per IRS, bitcoin is taxed as a property. [24]

In September 2016, a federal judge ruled that “Bitcoins are funds within the plain meaning of that term”. [25]

Bitcoin is legal in Mexico as of 2017. It is to be regulated by the Fintech Law. [26]

Central America Edit

News reports indicate that bitcoins are being used in the country. [1] :Nicaragua

Caribbean Edit

South America Edit

Bitcoins may be considered money, but not legal currency. A bitcoin may be considered either a good or a thing under the Argentina’s Civil Code, and transactions with bitcoins may be governed by the rules for the sale of goods under the Civil Code. [1] :Argentina .

The Central Bank of Bolivia issued a resolution banning bitcoin in 2014. [27]

Not regulated, according to a two thousand fourteen statement by the Central Bank of Brazil concerning cryptocurrencies. [28]

There is no regulation on the use of bitcoins. [1] :Chile

A twenty six March two thousand fourteen by Superintendencia Financiera de Colombia states that the use of bitcoin is not regulated. [29]

The Ecuadorian government has issued a ban on bitcoin and other digital currencies. [30]

The National Assembly of Ecuador banned bitcoins including other decentralized digital/crypto currencies, due to the establishment of a fresh state-run electronic money system. Ecuador’s fresh project would be managed by the government and tied directly to the local currency—the dollar. Users will be able to pay for select services and send money inbetween individuals. This was slated to begin in mid-February 2015. “Electronic money is designed to operate and support the monetary scheme of dollarization,” economist Diego Martinez, a delegate of the President of the Republic to the Board of Regulation and Monetary and Financial Policy. [31]

Asia Edit

Central Asia Edit

In a July 2014, statement of the National Bank of the Kyrgyz Republic made clear that “the use of ‘virtual currency’, bitcoins, in particular, as a means of payment in the Kyrgyz Republic will be a disturbance of the law of our state.” [32]

Eurasia Edit

The use of bitcoins is not regulated in Cyprus. [1] :Cyprus

Western Asia Edit

As of 2017, the Israel Tax Authorities issued a statement telling that bitcoin and other cryptocurrencies would not fall under the legal definition of currency, and neither of that of the a financial security, but of a taxable asset. [33] Each time a bitcoin is sold, the seller would have to pay a capital gains tax of 25%. Miners, traders of bitcoins would be treated as businesses and would have to pay corporate income tax as well as charge a 17% VAT. [34]

Concurrency/Bitcoin is not banned by any governmental party in Saudi Arabia. Only Saudi Arabian Monetary Authority (sama) have warned from using it as it is high risk and recognized in SA and its dealers will not be assured any protection or rights. [35] [ need quotation to verify ]

The government of Jordan has issued a warning discouraging the use of bitcoin and other similar systems. [36]

The Central Bank of Jordan prohibits banks, currency exchanges, financial companies, and payment service companies from dealing in bitcoins or other digital currencies. [37] While it warned the public of risks of bitcoins, and that they are not legal tender, bitcoins are still accepted by petite businesses and merchants. [37]

The government of Lebanon has issued a warning discouraging the use of bitcoin and other similar systems. [36]

Southern Asia Edit

In September 2014, Bangladesh Bank said that “anybody caught using the virtual currency could be jailed under the country’s rigorous anti-money laundering laws”. [38]

On twenty eight December 2013, the Deputy Governor of the Reserve Bank of India, K. C. Chakrabarty, made a statement that the Reserve Bank of India had no plans to regulate bitcoin. [39] [40]

As of May 25, 2017, the State Bank Of Pakistan does not recognise digital currencies. FBR (Federal Board of Revenue) is investigating the traders of digital currencies for tax evasion and money laundering. The trade of bitcoin is presently not regulated by laws. [41]

Eastern Asia Edit

While private parties can hold and trade bitcoins in China, regulation prohibits financial firms like banks from doing the same. [6] :China

On five December 2013, People’s Bank of China (PBOC) made its very first step in regulating bitcoin by prohibiting financial institutions from treating bitcoin transactions. [42] In a statement on the central bank’s website the PBOC said financial institutions and payment companies cannot give pricing in, buy and sell bitcoin or insure bitcoin-linked products.

On sixteen December two thousand thirteen it was speculated that the PBOC had issued a fresh ban on third-party payment processors from doing business with bitcoin exchanges, [43] however a statement from BTC China suggests this isn’t accurate, and rather payment processors had voluntarily withdrawn their services. [44]

On one April two thousand fourteen PBOC ordered commercial banks and payment companies to close bitcoin trading accounts in two weeks. [45] Trading bitcoins by individuals is legal in China. [42] [46]

On nine February 2017, numerous bitcoin exchanges in China delay or pause bitcoin withdraw service, with or without announcement. Some of the announcements, [47] [48] [49] [50] if not all, claim that regulation activities have been or are to be taken. News resources [51] also display that, albeit such activities were carried out by PBOC, they were not done via legal approaches, but by “appointment” instead. None of the exchanges introduced or have claimed to receive any lawful paperwork.

On eight January 2014, the Secretary for Financial Services and the Treasury addressed bitcoin in the Legislative Council stating that “Hong Kong at present has no legislation directly regulating bitcoins and other virtual currencies of [a] similar kind. However, our existing laws (such as the Organised and Serious Crimes Ordinance) provide sanctions against unlawful acts involving bitcoins, such as fraud or money laundering.” [1] :Hong Kong

On sixteen November 2013, Norman Chan, the chief executive of Hong Kong Monetary Authority (HKMA) said that bitcoins is only a virtual commodity. He also determined that bitcoins will not be regulated by HKMA. However, the authority will be closely watching the usage of bitcoins locally and its development overseas. [52]

Japan officially recognizes bitcoin and digital currencies as money. [53]

On seven March 2014, the Japanese government, in response to a series of questions asked in the National Diet, made a cabinet decision on the legal treatment of bitcoins in the form of answers to the questions. [54] The decision did not see bitcoin as currency nor bond under the current Banking Act and Financial Instruments and Exchange Law, prohibiting banks and securities companies from dealing in bitcoins. The decision also acknowledges that there are no laws to unconditionally prohibit individuals or legal entities from receiving bitcoins in exchange for goods or services. Taxes may be applicable to bitcoins.

According to Nikkei Asian Review, in February 2016, “Japanese financial regulators have proposed treating virtual currencies as methods of payment equivalent to conventional currencies”. [55]

The city of Hirosaki is officially accepting bitcoin donations with the aim of attracting international tourists and financing local projects. [56] [57] In 2017, the country’s government officially recognized bitcoin as a method of payment. [58] [59]

While not illegal in the country, Korean authorities will prosecute illegal activity involving bitcoin [60] and have indicted at least one individual for purchasing drugs with bitcoin. [61]

There are no laws in South Korea regulating the use of bitcoin at present. [1] :South Korea On December 12, 2013, the president of the Bank of Korea recommended at a press conference that bitcoin be regulated in the future. [62]

Bitcoin ATMs are banned here [6] :Taiwan but bitcoins can be purchased at over six thousand convenience store kiosks. [63] [64]

Regulators have warned the public that bitcoin does not have legal protection, “as the currency is not issued by any monetary authority and is therefore not entitled to legal claims or assure of conversion”. [65]

While bitcoin is not illegal in Taiwan, financial institutions have been warned by regulators that necessary regulatory deeds may be taken if they use it.. [1] :Taiwan

On six December 2013, Perng Fai-nan said that bitcoin is only used in certain communities. Besides, he also opined that the value of bitcoin is a bubble and is very volatile. Therefore, he advised the public against the speculation of bitcoins to prevent making a loss during the process. The central bank is closely watching the development of bitcoin and plan to impose regulations in the future. [66]

On thirty one December 2013, Financial Supervisory Commission (Republic of China) (FSC) and CBC issued a joint statement which warns against the use of bitcoins. It is stated that bitcoins remains very volatile, very speculative, and is not entitled to legal claims or assure of conversion. [67]

On five January 2014, FSC chairman Tseng Ming-chung stated that FSC will not permit the installation of bitcoin ATM in Taiwan because bitcoin is not a currency and it should not be accepted by individuals and banks as payment. [68]

However, despite this, three of the four major convenience store chains in Taiwan make available purchases of bitcoin through their kiosk systems, [Sixty-nine] and the largest chain now permits bitcoin to be used for purchases of goods. [70]

Southeast Asia Edit

Presently Bank Indonesia does not have detailed policies of regulating or banning bitcoins usage. [71] [72]

No official statement regarding the Bank Negara Malaysia’s views of the bitcoin system was located. [1] :Malaysia

On four November 2013, Bank Negara Malaysia (BNM) met with local bitcoin proponents to learn more about the currency but did not comment at the time. [73] BNM issued a statement on six January two thousand fourteen that bitcoin is not recognised as a legal tender in Malaysia. The central bank will not regulate bitcoin operations at the moment and users should aware of the risks associated with bitcoin usage. [74] [75]

On six March 2014, Bangko Sentral ng Pilipinas (BSP) issued a statement on risks associated with bitcoin trading and usage. Recently virtual currencies were legalized and cryptocurrency exchanges are now regulated by Central Bank of the Philippines (Bangko Sentral ng Pilipinas) under Circular nine hundred forty four [76]

In December 2013, the Monetary Authority of Singapore reportedly stated that “[w]hether or not businesses accept bitcoins in exchange for their goods and services is a commercial decision in which MAS does not intervene.” [1] :Singapore

On September 22, 2013, the Monetary Authority of Singapore (MAS) warned users of the risks associated with using bitcoin stating “If bitcoin ceases to operate, there may not be an identifiable party responsible for refunding their monies or for them to seek recourse” [77] and in December two thousand thirteen stated “Whether or not businesses accept bitcoins in exchange for their goods and services is a commercial decision in which MAS does not intervene” [78] In January 2014, the Inland Revenue Authority of Singapore issued a series of tax guidelines according to which bitcoin transactions may be treated as a barter exchange if it is used as a payment method for real goods and services. Businesses that deal with bitcoin currency exchanges will be taxed based on their bitcoin sales. [79]

Bank of Thailand proclaimed bitcoin illegal in 2013, but some bitcoin companies have been able to obtain business licenses. [80] One startup denied a business license was reportedly told that “buying and selling bitcoins, using bitcoins to buy or sell goods and services, and transferring bitcoins in and out of Thailand were all presently illegal.” [81]

Bank of Thailand suggested that bitcoin is not illegal but warned against its use in 2016. [82]

Trading in bitcoin in Vietnam is still unrestricted and unregulated by law, and two largest bitcoin markets in Vietnam – VBTC and Bitcoin Vietnam are working without being restricted. In December 2016, the government confirmed to develop legal framework for bitcoin in Vietnam that should be finished by December 2017. [83]

Europe Edit

Central Europe Edit

On six December 2013, the Croatian National Bank reportedly conducted a discussion on the circulation of digital currencies and concluded that the bitcoin is not illegal in Croatia. [1] :Croatia

Bitcoin trading does not require authorization by the Czech National Bank and the Czech National Bank cannot grant such an authorization (2015). [84]

On nineteen August 2013, the German Finance Ministry announced that bitcoin is now essentially a “unit of account” and can be used for the purpose of tax and trading in the country, meaning that purchases made with it must pay VAT as with Euro transactions. It is not classified as a foreign currency or e–money but stands as “private money” which can be used in “multilateral clearing circles”, according to the ministry. [85] [86]

The use of the bitcoin in Poland is not regulated by a legal act at present. [1] :Poland

Szymon Woźniak of the Ministry of Finance made an official announcement on the legality of bitcoin on eighteen December two thousand thirteen at a conference at the Warsaw School of Economics stating that the Ministry of Finance does not consider bitcoin illegal and does not want to hinder its development. [87] He clarified that while not illegal, bitcoin cannot be considered legal tender, and, in the light of the directives of the European Union, it is neither electronic money. [87] As of January 27, two thousand fifteen several banks have closed accounts of clients trading bitcoin, and indicated “presumption of criminal offense” as the cause, with “criminal offense” presumably being “cryptocurrency trade”. [88] As of July 7, two thousand seventeen the National Bank of Poland (NBP) and Financial Supervision Authority (KNF) issued a comment on virtual “currencies”. [89] They underlined that virtual currencies (including bitcoin): (1) are not issued or ensured by the central bank, (Two) are not money, i.e. they are neither legal tender nor currency, (Trio) can not be used to pay tax liabilities, (Four) do not meet the criterion of universal acceptability in shopping and service points ,(Five) are not electronic money, (6) are not payment services (in legal terms), (7) are not financial instruments (in legal terms). They added that trading virtual currencies in Poland does not crack national or EU law, however, having virtual “currencies”, involves many risks: (1) risk related to the possibility of loss of funds due to theft, (Two) risk related to lack of ensure, (Trio) risk of lack of universal acceptability, (Four) risk related to the possibility of fraud, (Five) risk of high price switch. Because of these risks, the NBP and KNF warn against buying virtual currencies and investing in them. The NBP and KNF recognize that the purchase, possession and sale of virtual currencies by entities supervised by the KNF (e.g. banks) would be burdened with high risk and would not ensure a stable and prudent management of the financial institution. Financial institutions should be cautious about engaging and cooperating with virtual currency “trading” entities.

As of March 2015, an official statement of the Romanian National Bank mentioned that “using digital currencies as payment has certain risks for the financial system”. [90]

The National Bank of Slovakia (NBS), stated [91] that bitcoin does not have the legal attributes of a currency, and therefore does not fall under national control. [note 1] European legislation, including the Slovak law, does not define the activities associated with virtual currency. Such activities are not regulated and supervised by the National Bank of Slovakia or the European Central Bank. At the same time NBS points out that any legal person or natural person in the Slovak Republic shall not issue any notes or any other coins. Unlawful manufacturing of banknotes and coins and putting them into circulation is punishable by law. In this context, NBS points out that virtual currencies have not a physical counterpart in the form of legal tender and participation in such a scheme (virtual currency) is at your own risk. Exchanges or purchases of virtual currencies represent the business risk of investors and investors’ money are not protected. For any compensation of losses caused by such exchanges or purchases there is no legal entitlement.

On December 23, two thousand thirteen the Slovenian Ministry of Finance made an announcement [92] stating that bitcoin is neither a currency nor an asset. There is no capital gains tax chargeable on bitcoin, however bitcoin mining is taxed and businesses selling goods/services in bitcoin are also taxed.

Bitcoin businesses in Switzerland are subject to anti-money laundering regulations and in some instances may need to obtain a banking license. [93]

On five December two thousand thirteen a proposal was put forward by forty five members of the Swiss Parliament for digital sustainability (Pardigli), that calls on the Swiss government to evaluate the opportunities for utilization of bitcoin by the country’s financial sector. [94] It also seeks clarification on bitcoin’s legal standing with respect to VAT, securities and anti-money laundering laws. [95]

In response to the parliament postulates, the Swiss Federal Council issued a report on virtual currencies in June 2014. [96] The report states that since virtual currencies are not in a legal vacuum, the Federal Council has concluded that there is no need for legislative measures to be taken at the moment.

In 2016, Zug added bitcoin as a means of paying city fees, in a test and an attempt to advance Zug as a region that is advancing future technologies. [97] Swiss Federal Railways, government-owned railway company of Switzerland, sells bitcoins at its ticket machines. [98]

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