Bitcoin is the oldest, most expensive, and most commonly used cryptocurrency in the world. Since its appearance as the first cryptocurrency in 2009, it has opened the door for new payment methods, exchanges, and investments.
The number of owners and users of Bitcoin and other cryptocurrencies was and still rapidly increasing, therefore, governments had to adopt specific policies regarding this financial fact according to the economic factors within the country. Regulations are the main tools used by countries to declare their policies toward cryptocurrency.
Many countries adopted crypto-friendly policies by legalizing Bitcoin and other cryptocurrencies, some don’t have laws regulating cryptocurrency yet, some have restrictions on using cryptocurrency, and some completely banned all the activities related to cryptocurrency considering it a threat to the financial system’s stability and security.
Why Is the Legal Status of Bitcoin Important for users?
The legality of Bitcoin is the most important thing people must take into consideration before starting in buying, using, or investing in it since no one would like to be involved in illegal financial activities or break the country’s laws. Furthermore, cryptocurrency is a landscape where money laundering and fraudulent activities are common because of the anonymity associated with it. The lack of regularity means that there is no government control or protection which doubles the risks of using cryptocurrency.
However, legalizing Bitcoin and other cryptocurrencies might subject you to extra taxes since the profit generated from investing in them will be a legal source of income and will be imposed on different types of taxes like income tax and capital gains tax according to the tax regime in the country.
Does Bitcoin Legality Matter for Citizenship by Investment Seekers?
Citizenship by investment is an option becoming more popular over time for high-income individuals looking to obtain a second passport in a short time with fewer requirements. When choosing one of the available citizenship by investment programs, many aspects must be considered according to your needs.
One of the things that highly matter for crypto owners or investors is the legal status of Bitcoin and other Cryptocurrencies in the country they seek to get its passport for many reasons such as passing the diligence checks which require proving the legality of the source of your money and if you earned it from cryptocurrency investment and cryptocurrency is illegal in this country your application will be rejected. Moreover, if you plan to move to the country after obtaining its citizenship you will not be able to use cryptocurrency as a safe payment method or migrate your crypto wealth to it.
In order to attract more investors, many of the countries that provide citizenship by investment legalized cryptocurrency and some went beyond by accepting Bitcoin or any other cryptocurrency as a payment method for citizenship by investment like Antigua and Barbuda and Vanuatu.
Countries Where Bitcoin Is Legal
The number of countries where Bitcoin is legal is increasing, some countries took cryptocurrency adoption to another level by recognizing it as legal tender which means it is an official currency accepted in all payments within the country besides the original currency. Here are the lists of countries where Bitcoin is legal tender and top countries where Bitcoin is legal.
Countries officially recognizing Bitcoin as legal tender:
- El Salvador
- Central African Republic
- St. Kitts and Nevis (will take effect from March 2023)
Countries officially legalizing Bitcoin:
- Antigua and Barbuda.
- Australia
- Barbados
- Belgium
- Bulgaria
- Cayman Islands
- Chile
- Croatia
- Dominica
- Estonia
- Finland
- Germany
- Indonesia
- Italy
- Ireland
- Japan
- Lithuania
- Malta
- Mauritius
- Marshall Islands
- New Zealand
- Norway
- The Philippines
- Serbia
- South Korea
- Sweden
- Switzerland
- Ukraine
- The United Kingdom
- The United Arab Emirates
- The United States
- Uzbekistan
- Venezuela
Despite there isn’t a universal framework providing guidance for countries on how to deal with Bitcoin and other cryptocurrencies and a large number of countries don’t regulate or ban them, the ownership and investment in cryptocurrency are maximizing worldwide and it will be inevitable for all countries to set a framework to deal with this economic fact. So, it is predictable that the number of countries where Bitcoin is legal will significantly grow within the next few years and a larger number of people will have safe access to Bitcoin operations within a legal frame.
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