So far, Japan is the only country that has accepted Bitcoin as a legal tender. In the rest of the world, there are some countries in which Bitcoin trading and mining is a punishable offence. The majority of countries are trying to create regulatory frameworks to prevent Bitcoin from being used for money-laundering, terror funding and other illegal activities. Central banks and governments of a lot of countries have issued warnings for the risks associated with Bitcoin and other cryptocurrencies.
Financial institutes in many countries are barred from performing any financial activity that involves cryptocurrencies such as Bitcoin. However, people in most the countries can buy or sell cryptocurrencies and also perform transactions as these coins are not in the control of any government. In our previous article, we have explained the legality of Bitcoin in some major Asian countries. Today, we are going to cover the legal status of Bitcoin in major countries from the rest of the continents.
Bitcoin in Australia/Oceania
Many Australian consumers fell prey to cryptocurrency scams and lost approximately $21 mln in total. This figure was revealed in the annual scam report published on May 21 by Australian Competition and Consumer Commission’s (ACCC). On April 3rd 2018, new legislative guidelines were introduced for cryptocurrency exchanges operating in the country. So, all digital currency exchanges have to get registered and complying with anti-money laundering and counter-terrorism financing law is also mandatory. Exchanges have to verify the identities of their customers. Cryptocurrency exchanges in Australia have to keep certain records for seven years. All suspicious matters have to be reported to AUSTRAC.
People living in New Zealand can buy or sell Bitcoin and other cryptocurrencies. However, the market is unregulated. Bitcoin is not a financial product. So far, New Zealand hasn’t made any decision on how to apply laws and regulations on cryptocurrencies. However, Bitcoin is not illegal in the country. The need of legal framework has been recognized.
Bitcoin in Africa
On January 2018, Keeping risks involved in mind, cryptocurrency trading has been forbidden by the Grand Mufti of Egypt.
At the end of 2017, the foreign exchange authority of Morocco declared that use of Bitcoin and other cryptocurrencies within the country is violation of foreign exchange regulations and anyone violating these regulations would be met with penalties.
Buying and selling Bitcoin and other cryptocurrencies is illegal.
Virtual currencies are prohibited by Nigerian banks. However, the official stance of the central bank is still to be drafted when it comes to using cryptocurrencies as a payment method. Bitcoin is not a legal tender. However, citizens can buy or sell Bitcoin.
The South African Reserve Bank, in 2017, implemented a ‘sandbox approach’. The country created a testing draft for Bitcoin. A handful of startups were selected for cryptocurrency regulations. Bitcoin is not a legal tender. However, citizens can buy or sell Bitcoin. Their earnings from Bitcoins are taxable.
A cryptocurrency exchange Golix was banned by the Reserve Bank Of Zimbabwe. However, the exchange challenged the RBZ in the High Court of Zimbabwe and won the case. The ban is lifted and Golix and cryptocurrency exchanges can resume their operation.
Bitcoin in South America
A bank in the country has started cross-border payments using Bitcoin. However, this country has not drawn up any regulations for Bitcoin and other cryptocurrencies. Official warnings of the risks involved are issued by the central bank.
From 2014, any token that is not issued by the government is banned by the central bank of Bolivia.
Bitcoin in North America
On June 9th 2018, the official draft for regulating cryptocurrency exchanges and crypto payment processing was released. Exchanges and payment processors have to report transactions over Canadian $10,000. Exchanges and payment processors are treated as Money Service Business. Anti-money laundering and terror financing are taken very seriously.
Bitcoin and other cryptocurrencies are classified as Money Services Business. As compared to other countries, the USA government is working with positive approach and more open when it comes to cryptocurrencies such as Bitcoin. The rapid rise of Bitcoin and other cryptocurrencies has caused uneasiness among the leading financial regulators. Wells Fargo, A San-Francisco based bank has announced that its customer can no longer purchase Bitcoin or any other cryptocurrency using its credit card. By assets, this bank is the third largest bank in the country. Bank of America, J.P. Morgan Chase, and Citigroup have also made similar announcements in February.
Back in 2014, the central bank of Mexico issued a statement to block banks from dealing in Bitcoin or any other virtual currency. However, in 2015, the finance ministry clarified that despite of not being “legal tender,” Bitcoin could be used for making payments. And, the finance ministry also clarified that Bitcoin would be subjected to same anti-money laundering regulations and restrictions. From 2017 onwards, Bitcoin is legal in Mexico and all local exchanges are under the oversight of the Mexico central bank.
Bitcoin in Europe
Terror funding and money laundering are the major concerns of the European Union when it comes to cryptocurrencies. The European Union has adopted a cautious and calculated approach for the regulation of cryptocurrencies. In order to crackdown money laundering, the European Central Bank is tightening up control over digital currencies. According to a statement issued in 2017 by an ECB official, the ECB does not see Bitcoin as a threat. President Mario Draghi stated that Bitcoin was not mature enough for regulations. In recent developments, cryptocurrency platforms are directed to report any suspicious activity and conduct due diligence on their customers. Compliance with KYC (Know Your Customer) and AMP have been made mandatory. Most likely in 2020, this directive will be turned into a national law. So far, members of the EU are prohibited from introducing their own cryptocurrencies.
Bitcoin is banned in Ecuador. The government wants to tether the Bitcoin the Ecuadorian Dollar. The Ecuadorian government wants to control and regulate it. That’s why it is banned. However, anti-Bitcoin laws are not that strict. So, citizens are domestically dealing in Bitcoin and other cryptocurrencies.
With its very progressive attitude towards cryptocurrencies and cryptocurrencies regulations, a healthy and steady growth of ICO market is expected. A team of ICO experts is created for the development of regulation while keeping integration of cryptocurrencies market and traditional financial institution in mind.
On may 15 Alexei Mushak, a member of the Ukrainian Parliament posted on his Facebook page:
“We go to the home stretch to create conditions for digital tokens and cryptocurrency in Ukraine. This is the outcome of many meetings and work of many people. There are many more nuances left to figure out. The final version will be ready in two weeks. I ask you to comment and edit. The thoughts of market practitioners are especially important.”
So, the country is going to legalize Bitcoin and other cryptocurrencies. The country is aiming for a digital asset market that is free and transparent. Regulations are being made to store, use and exchange cryptocurrencies while keeping criminal activities such as terror funding and money laundering in check. The use of Blockchain technology in public sphere has been advocated. The Ukrainian National Securities and Stock Market Commission (SSMCS) made an announcement in May. SSMCS is considering recognizing Bitcoin and other cryptocurrencies as a financial instrument.
As cryptocurrencies are not regulated in the country, citizens are free to trade in cryptocurrencies. However, due to lack of regulations, there is a little protection available to customers. Financial Conduct Authority (FCA) issued warnings in November 2017 stating that cryptocurrencies such as Bitcoin are “high risk, speculative products”.
All exchanges are required to be registered with FCA and all exchanges have to comply with anti-money laundering regulations. And, earnings are also subjected to tax laws.
The French Finance Minister, Bruno Le Maire is passionate about cryptocurrencies. The Finance Minister has urged the nation to be a leader in Blockchain and cryptocurrencies.