The legal status of cryptocurrency varies a lot from country to country. In many countries, governments still do not know how to deal with the status of digital assets. In other places, there is either general compliance or restriction by government agencies and departments.
Indeed, most countries worldwide do not consider cryptocurrency illegal but do not officially regard it as a form of money like fiat currency. Some even recommend their people not to buy bitcoin with credit card.
In this article, you will have a full overview of cryptocurrency legislation around the world.
All North American countries – Canada, the United States, and Mexico- considers cryptocurrency legal. However, there are significant differences in specific aspects of each country’s legislation regarding the usage and taxation of digital assets.
The United States is one of the world’s biggest crypto hubs, both in terms of technological innovation and the number of total users and enthusiasts. However, there are still some controversies among several government agencies regarding the status of cryptocurrency as a form of money or financial security.
Entities like the US Treasury, US Commodity Futures Trading Commission (CFTC), Internal Revenue Service (IRS), and others share distinct opinions about the legal status of digital currencies.
However, there were some issues in Canada. The country enabled banking bans that prevented people from buying cryptocurrency using debit or credit cards. In Mexico, the legal status of cryptocurrency has been regulated by the FinTech Law since 2017.
Most countries in Central America consider cryptocurrency legal, which includes Jamaica, Costa Rica, Nicaragua, and El Salvador. The latter made Bitcoin a legal tender in the country in early June 2021.
There is only one country in South America that completely bans the usage and trading of cryptocurrency, which is Bolivia. To hinder the use of cryptocurrencies throughout the South American country, Bolivia’s Central Bank issued a resolution back in 2014 banning Bitcoin and other cryptocurrencies not regulated by the country.
Also, there were banking bans of digital assets in Colombia and Ecuador, but both countries consider all cryptocurrencies legal.
Cryptocurrency is neither prohibited nor incentivized in the Eurozone. Accordingly, the European Central Bank does not consider regulations of the traditional financial sector applicable to cryptocurrency, as it does not involve traditional financial actors.
While no European country – except for Russia – has any major problems regarding cryptocurrency’s legal status, the old continent has countries that are considered “crypto havens”, such as Malta.
Malta’s prime minister Joseph Muscat announced in 2017 that the country would develop a plan to promote bitcoin and blockchain technology.
The Maltese prime minister addressed the ability enabled by blockchain to handle, store and process sensitive data in a secure and decentralized manner.
Asia is one of the biggest continents on the entire planet, which means the legality of cryptocurrency varies a lot from state to state.
In this sense, Asia’s biggest dragon has a mixed relationship with digital assets. Thus, although China does not consider cryptocurrencies illegal, it hinders cryptocurrency mining and other crypto-related activities in the country.
Other countries like Vietnam and Cambodia are not crypto-friendly, while countries like Japan, Hong Kong, South Korea, the Philippines, Malaysia, Singapore, and Thailand are more compliant with the usage and trading of cryptocurrencies.
Most countries in the Middle East had mixed feelings towards cryptocurrency. Israel Tax Authorities issued a statement saying that cryptocurrencies would neither fall under the legal status of currency nor that of financial security, but of a taxable asset.
Other countries like the United Arab Emirates, Saudi Arabia, Jordan, Lebanon, Turkey, Qatar, and Iran consider cryptocurrency legal while issuing official statements discouraging the use of digital assets or passing banking bans on crypto.
Cryptocurrency is considered legal both in Australia and New Zealand, as well as other islands in the various clusters up and down the Pacific Ocean – Melanesia, Micronesia, and Polynesia.
Currently, all crypto exchanges in Australia must register with Australia’s Transaction Reports and Analysis Centre to implement KYC policies and comply with anti-money laundering legislation.
In New Zealand, the country’s Reserve Bank affirmed that “non-banks do not need approval for schemes that involve the storage and/or transfer of value, as long as they do not involve the issuance of physical circulating currency (e.g., notes, coins).”
After Bitcoin’s bull run in 2021 and the growing acceptance of cryptocurrency both as a form of currency and as a hedging asset by traditional entities, there has been a major push across different countries to legalize and incentivize digital assets.
Nowadays, many countries are working on regulations to govern the process of exchanging digital assets, as well as using it both as a payment method and as a speculative asset. Another popular tendency is the creation of central bank-issued cryptocurrencies around the world.