Cryptocurrencies have been massively famous for 7-8 years now. People have been buying Cryptocurrencies for millions of dollars around the world every day. Still, the legal status of Cryptocurrencies is not clear in most countries of the world.
Levels of permissibility of cryptocurrencies:
There are four levels of the permissibility of cryptocurrencies around the world:
This means that Cryptocurrencies have the same status as the national currency of that country. Very few counties have that kind of permissibility for Cryptocurrencies.
This refers to a situation in which Cryptocurrencies can be traded but it has not been acknowledged as a legal tender i.e. it is not as legal as the local currency of that particular country.
It means that there are some restrictions on its use of it. It does not mean a complete ban on it, but rather some specific restrictions.
It means that either cryptocurrency is completely illegal or is almost not permissible.
Legal status of cryptocurrency in world
The legal status of cryptocurrency in the top 10 economies of the world.
The USA Department of Treasury has defined cryptocurrency as a convertible currency with an equivalent value to real currency or one that can act as a substitute for real currency.
Cryptocurrencies are completely banned in China.
Cryptocurrency is viewed as property and is taxed in the Japan States as Miscellaneous Income, under the Payment Services Act (PSA)
The German Federal Central Tax Office or Bundeszentralamt für Steuern (BZSt) treats bitcoin and other virtual currencies as private money for tax purposes. Cryptocurrency is not treated as foreign currency, legal tender, nor property under the German Tax Acts.
Cryptocurrency regulations in the UK have been measured, but have matured in the post-Brexit financial landscape. Although the UK confirmed in 2020 that crypto assets are property, it has no specific cryptocurrency laws and cryptocurrencies are not considered legal tender.
Recently in the union budget, all Cryptocurrency has been identified as a digital asset and is going to be taxed at 30 percent. Still, it is not acknowledged as a legal tender.
Cryptocurrency is subject to Income Tax in France. The General Directorate of Public Finances has set out guidelines on how cryptocurrency buying, trading, and mining are taxed.
Citizens of Italy can convert, buy, and sell cryptocurrencies with fiat. Supported payment methods are Bank deposits.
In Canada, cryptocurrency is not legal tender but can be used to buy goods and services online or in stores that accept them.
Currently, South Korea’s cryptocurrency regulation means that crypto is not considered legal tender. Exchanges, while legal, are part of a closely-monitored regulatory system.
As you can understand by this, the whole world right now has a mixed approach to Cryptocurrencies. However, most of these countries are trying to come up with their own digital currencies. It would be interesting to see what developments happen in the field of cryptocurrencies in the upcoming years.