Cryptocurrency, in general, and Bitcoin, in special, has blasted into the mainstream a couple of years ago when its exchange rate started climbing at a crazy rate. It stayed on the front page of newspapers and online outlets for a while then, after its “price” settled at a less spectacular level, it has slowly disappeared from the headlines. Aside from the many blockchain-based initiatives and fintech companies that its ascent brought to life (not to mention the many altcoins that it effectively pushed into existence) its meteoric rise had a major benefit: regulators can no longer dismiss it as a passing fad. They have to deal with it.
The future of cryptocurrency lies in regulations. Governments around the world have to accept it as a viable alternative to traditional money – but many of them failed to do so to this day. Let’s take a brief look at the various legal stances countries around the world have toward Bitcoin and cryptocurrency as a whole today.
Africa – mixed
Most African countries have pretty much no legal standing when it comes to cryptocurrency. “Virtual currency” is banned in Algeria, Egypt has issued a “haram” (prohibition) on its use and ownership, and their use and exchange are also punishable in Morocco. In Nigeria, in turn, the central bank has admitted that it does not control cryptocurrencies, so it can’t regulate it either. In South Africa, virtual currencies have “no legal status or regulatory framework”, and cryptocurrency can’t be accepted as payment in Namibia either. Zimbabwe has not officially permitted the use of cryptocurrency but it has licensed BitMari, a Pan-African blockchain platform through a local banking partner.
The Americas – mostly legal
In Canada, companies dealing in cryptocurrencies are subject to registration with FINTRAC, the Financial Transactions and Reports Analysis Centre of Canada, otherwise, they are not allowed to operate or work with local banks. Bitcoin is considered a “convertible decentralized virtual currency” in the United States since 2013, with companies active in the field having to comply with regulations regarding money-laundering, and make reports to FinCEN, including Suspicious Activity Reports (SARs) and Currency Transaction Reports. Bitcoin is legal and regulated in Mexico.
Cryptocurrency is legal in many Central and South American countries, with the exception of Bolivia, Colombia, and Ecuador.
Asia – mixed
Cryptocurrency is legal in Israel, Jordan, Lebanon but illegal in Iran, Saudi Arabia, Bangladesh, Nepal, Pakistan, Taiwan, and China. The stance of the United Arab Emirates is mixed – on one hand, all transactions in virtual currencies are prohibited, on the other, Dubai gold trader Regal RA DMCC is licensed to trade cryptocurrencies.
Bitcoin and the altcoins are legal in Japan, and South Korea – in India and Thailand, they are subject to a banking ban and they are illegal as a payment tool in Indonesia and Vietnam (owning them is not against the law).
Europe, Australia, and New Zealand – legal
While the regulators and financial authorities of most European countries have spoken out against cryptocurrency, citing the risks it poses to the traditional financial systems, their use and exchange are legal in the vast majority of them. The same goes for Australia and New Zealand.
Unfortunately, the legal status of cryptocurrencies is fragmented at best. For it to become a viable alternative to traditional currency, governments will have to see it not as a threat to the traditional financial systems – and this will take quite some time.
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