Bitcoin was one of the first and most widely discussed cryptocurrencies in the world. However, Bitcoin is restricted in many countries because it is considered to be too risky and volatile because of the regulations.
Other governments are creating blueprints to include Bitcoin in their financial strategy after El Salvador stated last week that it would integrate Bitcoin into its mainstream financial systems. Let us look at the countries where Bitcoin is recognised as a legal cryptocurrency in this article.
The United States has long been positive about bitcoin, and the Financial Crimes Enforcement Network (FinCEN) of the United States Department of Treasury has been offering bitcoin recommendations since 2013. In addition, the Internal Revenue Service classifies bitcoin as property for tax purposes. Several government agencies, on the other hand, are attempting to restrict the use of bitcoin for unlawful transactions.
Canada has long had a good attitude regarding bitcoin, and the Canada Revenue Agency has already classified it as a commodity. Bitcoin transactions are classified as barter transactions by the agency, and the income generated is classified as business income. Furthermore, bitcoin exchanges are regarded as a service in Canada. However, this puts it on the radar of anti-money laundering (AML) legislation.
Australia, like the United States and Canada, has made bitcoin legal. Buyers must, however, adhere to the Anti-Money Laundering and Counter-Terrorism Financing Act. Furthermore, the Capital Gains Tax applies to bitcoin and other cryptocurrencies.
The European Court of Justice (ECJ) declared in 2015 that purchasing and selling digital currencies in the EU falls within the category of "delivery of services" and is therefore exempt from VAT (VAT). Furthermore, certain EU countries, including Finland, Belgium, the United Kingdom, and Bulgaria, have created their own initiatives to make Bitcoin trading easier.
El Salvador has become the world's first country to accept bitcoin as legal cash. The country's Congress passed a proposal in June 2021 to formally recognise bitcoin as a means of payment, making it fully legal.
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