In 2021, more and more countries are allowing their citizens to use Bitcoin and other cryptocurrencies with no legal restrictions, as Bitcoin and other cryptocurrencies are becoming more and more widespread, with billions of dollars of transactions per year.
However, there are some countries that are still very careful in allowing their citizens to use crypto assets as a means of payment. They might restrict their citizens to use these crypto assets to pay for goods and services, even though Bitcoin and other crypto-assets might be legal to trade in those countries.
The primary reason behind the restriction is that crypto-assets are virtual currencies with a decentralized system, meaning that it doesn’t have any central regulating system.
It also means the traders of those crypto-assets don’t get any protection from the banking laws. Countries that allow the citizens to trade for these cryptocurrencies might prohibit them from using them as a means of payment because of this reason.
Also, some countries might regard Bitcoin and other crypto assets to be illegal.
In this article, we will feature 5 cryptocurrency legal countries in 2021.
- 1. European Union
- 2. United States
- 3. Japan
- 4. South Korea
- 5. Hong Kong
1. European Union
All the countries in the European Union territory don’t have any restrictions about the use of Bitcoin and other cryptocurrencies.
They allow the citizens to use these crypto-assets as they see fit, such as in the transactions or payments for goods and services. They regard Bitcoin as the virtual currency that anyone can convert to the traditional currency.
Here are some rules about the use of Bitcoin and other crypto-assets in the EU:
- For any conversion between Bitcoin and traditional currency, VAT or GST is not applicable.
- For products and services, the government will apply VAT or GST when you use Bitcoin as a means of payment.
- The EU regards Bitcoin as a currency instead of a commodity.
- Bitcoin is a convertible virtual currency according to the European Central Bank.
- To deal with money laundering and terrorism using Bitcoin and cryptocurrencies, the European parliament recommends setting up a task force to monitor these virtual currencies.
Also Read: How to Send Bitcoin from Paper Wallet?
2. United States
The United States government regards Bitcoin and other cryptocurrencies as convertible virtual currencies, which are legal to use by the citizens of the United States.
However, the government regards the crypto assets as commodities, so they will tax the owner of cryptocurrencies the same way as they are taxing their property.
Here are some rules about Bitcoin and other crypto assets in the US:
- Bitcoin is a decentralized virtual currency that is convertible according to the US Treasury.
- The IRS will tax Bitcoin and other crypto-assets as property.
- The CFTC classifies Bitcoin and other cryptocurrencies as a commodity.
- Bitcoin money exchangers will need to register within the US FinCEN.
- Also, any business that provides services for Bitcoin exchange will need to have anti-money laundering regulations.
Japan also considers Bitcoin and other cryptocurrencies to be legal, and individuals and businesses can use Bitcoin in their dealings.
However, Japan government prohibits the use of crypto assets for money laundering, so every business service that uses Bitcoin and other crypto assets will need to have anti-money laundering rules to protect their customers.
Here are some rules about Bitcoin and other cryptocurrencies in Japan:
- Banks and securities companies cannot deal with Bitcoin and other cryptocurrencies.
- The government might apply taxes to Bitcoin and other crypto-assets.
- Individuals and businesses can use Bitcoin and cryptocurrencies in their transactions.
- Cryptocurrency exchanges must register their business, keep a record of their transactions, and keep the measures to protect their customers or users.
- According to the Payment Services Act in Japan, the government considers cryptocurrencies as property stored in electronic storage or device.
4. South Korea
South Korea is a country in Asia that allows its citizens to use Bitcoin and other cryptocurrencies, but with certain restrictions.
For instance, the government won’t allow any minors and foreigners to trade any type of cryptocurrency. Also, the buying and selling of Bitcoin and other crypto-assets need to go through certain banks.
Here are some rules of using Bitcoin and other crypto assets in South Korea:
- The government prohibits crypto trading for minors and foreigners.
- For adult citizens, they need to use certain banks to trade crypto assets.
- The banks need to have an account with crypto trading services to allow the citizens to trade crypto assets.
- The banks must verify the identity of crypto traders before they allow any trading or transaction to happen.
- Also, the banks and exchangers must have anti-money laundering regulations in place to prevent any money laundering practices.
5. Hong Kong
Hong Kong is another country in Asia that legalizes the trades and investments of Bitcoin and other cryptocurrencies. The government allows the citizens to take part in Bitcoin and other crypto trading, as the country doesn’t have any direct regulations to prohibit it.
However, just like any other crime, the country would punish anyone using Bitcoin and other cryptocurrencies for any illegal acts.
Here are some rules for using Bitcoin and other cryptocurrencies in Hong Kong:
- The government allows the citizens to trade or invest in Bitcoin and other crypto-assets.
- The government doesn’t allow the citizens to use cryptocurrencies for fraudulent acts and money laundering.
- Hong Kong government regards Bitcoin as a virtual commodity.
- The Hong Kong Monetary Authority (HKMA) doesn’t regulate the use of Bitcoin.
- However, the HKMA will monitor the use of cryptocurrencies and also monitor their development in the global landscape.
Also Read: 3 Biggest Bitcoin Price Predictions
In all these countries where cryptocurrencies are legalized, the citizens are using various apps like bitqt app, etc. to trade in the crypto market.
These are some cryptocurrency legal countries in the world that allow the trading and investing of Bitcoin and other cryptocurrencies in their countries. There are still many other countries that make it legal for their citizens to make transactions with Bitcoin and other crypto assets, and there are other countries that make it illegal for their citizens to use these cryptocurrencies.
However, the spread of Bitcoin and other crypto-assets and the constant rise in global popularity for these virtual assets might make more and more countries become more open to these crypto-assets in the future. Why not start investing in some crypto assets now, if you live in a country where Bitcoin and other cryptocurrencies are legal to use?