In which countries is Bitcoin legal and what does that mean?
During the first years of Bitcoin, few people could have imagined what a huge impact this cryptocurrency would have on the world. Not only have many people become rich by investing in Bitcoin, but there are also countries that are getting closer to accepting Bitcoin as a means of payment.
Most countries allow their citizens to own and use Bitcoin. However, almost all countries have established certain laws and regulations in recent years to regulate Bitcoin. However, there are also some countries that have decided to ban Bitcoin completely.
It is difficult to ban Bitcoin completely because the blockchain is universal. A country cannot ban the blockchain. However, it can ban mining, as China has done.
We tell you below in which countries you could use Bitcoin as legal tender, and which countries will be open to it in the near future.
In which countries is it legal to have and use Bitcoin?
Bitcoin is legal to possess and use in every country in the world, except those we list further in this article.
In the United States, anyone may own, trade, or use Bitcoin as a means of payment. However, the country does not consider Bitcoin to be legal tender. U.S. citizens do have to pay taxes on Bitcoin and other crypto coins they own.
European Union citizens can also own and use Bitcoin without worry. Countries in the EU consider Bitcoin to be a crypto asset, and citizens must therefore pay taxes on it. The European Central Bank (ECB) has indicated that crypto is not under the control of the authorities and is warning people of the risks involved.
It is expected that the European Union will come up with new laws and regulations for cryptocurrencies in 2025, called MiCAR (Markets in Crypto Assets Regulation). It is also known that the ECB is in the process of researching its own digital currency. This coin would be managed by the central bank, and therefore differs on that insight from Bitcoin, which is managed by a decentralized network of independent individuals.
It is not only in the European Union that we see governments working on new laws and regulations for crypto. There are also many more countries that are researching their own digital currencies. Whereas in the beginning it was still thought that crypto was just a hype, governments are now aware that crypto will remain for the long term. Regulation of crypto, they believe, should ensure that the risks to citizens are reduced and that there is more control over the flow of money.
Where is Bitcoin a legal tender?
As of March 2022, El Salvador is still the only country in the world that has accepted Bitcoin as legal tender. It is also known that the country of President Nayib Bukele is in possession of large amounts of Bitcoin. Bukele has been in the news more often for his remarkably positive statements about crypto, with Bitcoin in particular.
For example, the president of El Salvador indicated that the country would start a Bitcoin mining farm whose energy would be generated by the island's volcano. According to many, this is a good step toward making crypto more sustainable. Indeed, there had long been criticism of Bitcoin's energy consumption. Mining Bitcoin (validating transactions and creating new coins) requires an awful lot of energy. Most of this energy is generated by unsustainable sources.
Which countries are going to make Bitcoin a legal tender?
At the moment, no other countries have indicated that they will accept Bitcoin as legal tender in the near future. However, there are several rumors that more countries in South America and Africa are open to accepting Bitcoin as a means of payment.
These are mainly countries that are less economically stable than European and North American countries. The fiat currency in these countries has often already depreciated in recent years due to inflation. Bitcoin could be a solution for them because there is a limited supply of Bitcoin (21 million). Thus, inflation could not play a role.
In addition, owning Bitcoin could help in further development of the country. Increases in the value of Bitcoin would allow governments to increase their capital. The profits could then be used to develop infrastructure, education and tourism.
Where is Bitcoin illegal?
A number of countries do not allow the possession or use of Bitcoin. Citizens who decide to use Bitcoin can expect to be fined or imprisoned. The amount of the penalty varies from country to country.
In these countries, the use and possession of Bitcoin is prohibited:
In most countries around the world, it is permitted to use, own and trade Bitcoin and other cryptocurrencies. It is a trend that more and more countries are regulating Bitcoin by putting in place more laws and regulations. Only a few countries have banned Bitcoin and other cryptocurrencies. In some cases, citizens can expect a penalty if they violate the rules, which can range from a fine to imprisonment.
El Salvador is the only country in the world where Bitcoin is legal tender. Citizens can pay with Bitcoin anywhere in this country. There are rumors that several South American and African countries want to accept Bitcoin as a means of payment. However, so far there is nothing official about this.