The popularity of digital assets, which are becoming increasingly attractive to investors and payers, is growing rapidly.
Therefore, it is not surprising that in many countries, Bitcoins and other electronic money are receiving legal, albeit sometimes "semi-official" status, on the basis of which their trade becomes legal.
About countries that have allowed cryptocurrency, storage and use of relevant virtual funds at the legislative level, the following text will tell.
General trends
As of this year, the use of digital currency has been officially recognized by more than 601 countries around the world. The leader in this regard is the Western European region. In total, according to the Coin Dance portal, 111 countries have recognized the legal status of cryptocurrency assets.
Their laws do not hinder the trading of electronic money or prohibit the storage of such assets, although no state regulation is provided for the relevant options.
An obvious fact is the lack of unified decisions, that is, a single legislative framework, which does not allow for more or less clear definition of common principles. regulation of cryptocurrencies in the world.
Information regarding the specifics of the status of the relevant assets, among which Bitcoin holds the leading position, in individual countries is provided below.
El Salvador
This state is the first and currently the only country on the planet whose law has allowed Bitcoin to be fully integrated into the financial system as a payment instrument that is automatically converted into US dollars.
The relevant historic decision by the government of El Salvador was made in 2021 on September 7 and remains in effect. Interestingly, it resulted in the launch of its own e-wallet application. The program, which allows users to freely perform cryptocurrency exchange options and store these assets, is called Chivo.
The authorities of El Salvador have also initiated the installation of Bitcoin ATMs throughout its territory, enabling its citizens to exchange electronic funds for cash.
Central African Republic
The second country to officially confirm legal status of cryptocurrency 2022, recognizing it as a means of payment at the state level.
However, the following year, this decision was overturned. The CAR government decided to cancel it due to several factors, including citizens' limited access to electricity and the Internet and the extremely low level of their financial income.
USA
In the United States, digital money is in the legal field - it is recognized as convertible currency. The service of American companies involves the exchange of Bitcoin and the processing of its transactions. This type of financial services is classified by US law as an MSB.
The corresponding options of the institutions of this countries where cryptocurrency is legal are quite widely used, are registered by the Ministry of Finance, and are also subject to banking confidentiality.
Canada
Although Canadian laws do not confirm the status of digital currencies as a means of payment, transactions with such money are not prohibited.
Moreover, Canada considers crypto exchanges to be official financial institutions. Their activities are regulated by competent authorities. Cryptocurrency exchanges must officially submit reporting information and data on suspicious transactions to these structures.
Japan
The government of the Land of the Rising Sun has also not recognized cryptocurrency as an official means of payment. This means that cryptocurrency and banks They have nothing in common in it – financial institutions are not allowed to conduct transactions with electronic assets.
But individuals and most commercial companies are not deprived of this right. They use it when exchanging Bitcoin for services and goods, and the exchange of cryptocurrency funds is regulated by Japanese law.
Great Britain
According to experts, this European country is gradually turning into a global cryptocurrency center.
It has been less than a couple of years since the UK government passed a bill aimed at regulating the cryptocurrency market. This legislative act envisages granting stablecoins the status of a means of payment and integrating blockchain into the country's financial market.
Australia
On the Australian continent, in most cases, the official cryptocurrency taxation occurs during the performance of financial transactions with property. But if the ownership of such funds is limited to their preservation, the state practically does not oblige such a person or company to pay taxes for this.
At the same time, Australian tax authorities must keep records of all transactions carried out using digital assets and retain the relevant accounting data.
Mexico
According to Mexican law, electronic currency does not have the status of legal tender, but the state does not prohibit the use and trade of bitcoins and other digital currencies.
In 2018, the Mexican authorities adopted a law that regulates the legal framework for regulating processes related to the use of electronic financial technologies, including cryptocurrencies.
Spain
Cryptocurrency-related activities in Spain are overseen by a special body, the National Securities Market Commission and the central bank. These authorities, known as the Comisión Nacional del Mercado de Valores, CNMV and Banco de España, monitor options trading in electronic assets and ensure that their participants pay corporate taxes on capital gains in a timely manner.
At the same time, cryptocurrencies do not have the status of legal tender in Spain as such.
Venezuela
The impetus for the increased use of digital assets in this country was the hyperinflation of the national currency. In 2018, the government of this state even launched its own cryptocurrency, called Petro, and supported by the extraction of natural resources, in particular oil.
Although the project was not successful and did not gain widespread adoption, Venezuelan citizens quite often use the currencies Bitcoin, Ethereum, and Litecoin, which are partially legalized by the state, but not banned.
Germany
This is a country worth mentioning when talking about cryptocurrency taxes in countries European Union. They must be paid annually by German individuals if they have received a profit of more than €600 as a result of financial transactions with electronic money.
The Federal Financial Supervisory Authority BaFin considers electronic assets to be a “unit of account,” and the German authorities have granted them legal status for trade and investment, recognizing them as private money.
Argentina
This country is the Latin American leader in the popularity of crypto assets, which is caused by high inflation and instability of the local economy.
Due to the rapid increase in prices, Argentines prefer to keep their savings in the form of Bitcoin and other digital currencies. In this way, citizens of this country try to protect their savings from devaluation.
In 2017, the Argentine government passed a law requiring citizens to declare income from electronic financial transactions for tax purposes. However, virtual money has not yet acquired the status of legal tender in this country.
Turkey
It failed to become an official cryptocurrency in this Asian country either, as confirmed by a statement published by its central bank, CBRT, in 2021.
At the same time, this institution did not prohibit trading and investment through electronic finance. Thus, the use of digital assets in Turkey has effectively become a “gray area.”
But in 2023, the Turkish government announced plans to legalize and regulate cryptocurrency activities, confirming this intention with a corresponding bill. This document, which experts called progressive, gave permission for trading in digital currency on electronic platforms.
Poland
There is no government ban on the use of cryptocurrencies in Poland, whose citizens who are owners of digital money must comply with certain rules of the Tax Code.
According to Polish law, cryptocurrency exchanges and platforms must register, prevent money laundering, and cooperate with state supervisory authorities. Financial fraud in this country is severely punished, including that related to the field of electronic finance.
Ukraine
In our country, Bitcoin is not officially recognized as a means of payment, but there is no ban on trading in relevant assets.
Cryptocurrency is considered property, the use of which is permitted for investment and other financial options.
Since September 2021, a Law has come into force in Ukraine, which regulates the use of virtual assets and ensures their legal status.
Currently, electronic currencies have acquired official legal status in Uzbekistan, Kazakhstan, and Brazil. In Iran, Portugal, and India, there is currently no clear regulation of the cryptocurrency issue, nor is there an official taboo on trading in electronic funds.
The European Union has developed and introduced the Markets in Crypto Assets (MiCA) regulation since June 2023. Its goal is to control the issuance and service related to crypto assets throughout the European Union.
We also offer you to view the article – Which countries have banned cryptocurrency and why?
