The Legal Status of Bitcoin

Questions have arisen unto the credibility and legality of using cryptocurrencies when doing business. This question is best answered regarding your country of residence or where you want to transact business using the currencies. You will find countries which have explicitly allowed their use and trade whereas others have completely banned or restricted it. Cryptocurrency here refers to bitcoin and its a number of other altcoins.

The next 8 countries have imposed an''absolute ban''on the use of cryptocurrencies in trade. Which means that cryptocurrency including bitcoins can NOT be found in these countries. They include:

1. Egypt

2. Algeria

3. Bolivia

4. Pakistan

5. Morocco

6. Nepal

7. Iraq

8. United Arab Emirates

Other 15 countries have imposed an''implicit ban''on the use of cryptocurrencies. An implicit ban means that the use of bitcoins and other altcoins is fixed in these countries. The countries include China, Bangladesh, Colombia, Indonesia, Iran, Kuwait, Lesotho, Qatar, Saudi Arabia, Bahrain, the Dominican Republic, Lithuania, Macau, Oman, and Taiwan.

Based on your country of residence, you are able to determine if you are free to make use of cryptocurrencies in operation, restricted or totally banned from their use. However, different governments have classified bitcoin in criptomonedas chile numerous ways. For example, the Central Bank of China banned the handling of bitcoins by financial institutions in China. The ban was effected in the year 2014. In Russia, the use of cryptocurrencies is allowed but it is illegal to purchase goods using any currency other the Russian Ruble. Therefore there exists an''implicit ban''on the use of bitcoins and probably all the cryptocurrencies in these countries.

Researchers have described cryptocurrency as a possible tool for evasion of economic sanctions. An example could be the evasion of sanctions against Russia, Iran and Venezuela. This caused a significant discomfort which generated a meeting between Russian and Iranian economic representatives. The aim of the meeting was to discuss means where to bypass the global SWIFT system through decentralized blockchain technology.

Also noted is that Russia supported Venezuela with the creation of petro (El Petro). El Petro is a national cryptocurrency which was initiated by the Maduro government in order to obtain valuable oil revenues by circumventing US sanctions. This shows the reason why usage of cryptocurrencies is not being met kindly by some governments. However, in August 2018, the Bank of Thailand made clear of its plans to generate its own cryptocurrency named the Central Bank Digital currency (CBDC).

Advertising

Advertisements regarding bitcoin and other cryptocurrencies is banned on Facebook, Twitter, Google, Linkedln, Bing, Snapchat, and MailChimp. Also in china, these internet platforms are banned from advertising bitcoins: Weibo, baidu and Tencent. Similar cases are experienced in the Japanese Line and Russian platform Yandex.

Tax Status

In the United States of America, the Internal Revenue Service (IRS) decided that bitcoin will undoubtedly be treated as property for tax purposes. The aftereffect of this ruling is that bitcoin will undoubtedly be susceptible to capital gains tax.

Bottom line
The Legality of bitcoins varies from country to country and remains undefined or changing in a lot of them.