Cryptocurrency has become an essential topic in everyone’s discussion. It is so much in demand that everyone is now interested in investing or trading in cryptocurrency. With the rise in profit generated via cryptocurrencies, more and more investors are keen on investing or trading in cryptocurrencies. However, this cryptocurrency framework is not established fully in all the countries. With the amendments of law in some of the countries, the legal status of cryptocurrency has become a hot topic. Since there are various aspects of the legality of cryptocurrency, let us discuss it in detail.
As mentioned above, every country has a different law for dealing in cryptocurrency. In some of the countries, the trading of bitcoin is absolutely legal and there are even tax exemptions on bitcoins in some of the countries whereas in some of the countries, including India, either it is banned or given no legal recognition.
Let us first talk about the countries where the use of cryptocurrency is totally legal and recognised. In USA, bitcoin is considered as legal under its regulations. One of the recognised cryptocurrency exchanges, Global Advisors Bitcoin Investment Fund (GABI) is the first one to get the legal status from the financial services commission of USA. It was a huge boom for bitcoin in Japan in 2017 as it was legally recognised as money by the formation of a separate law. Similarly, in Europe, bitcoin is given recognition by reducing tax implications hence encouraging investors and traders to capitalise their money on it. The bitcoin is given as a similar status as that of the traditional money in Singapore as they both have the same tax implications. For those who were still in a dilemma to trade in bitcoin or not due to its legal status, you can see that the above-mentioned countries are encouraging the investment in bitcoin tremendously and in coming years it will achieve more significance.
Now talking about those countries where cryptocurrency is either banned or unrecognised. In India, there is no particular law that states about the legal status of bitcoin and no abstinence from trading in bitcoins are mentioned thereof. Hence, if you are trading in bitcoins then you are not doing any illegal act. However, bitcoin is not considered as a legal currency in India, so a correct status still cannot be estimated. Also, there are some countries like Russia, Ecuador, Thailand and Bangladesh, where investing or trading in cryptocurrency is completely banned.
As mentioned above, India does not have any particular law regarding cryptocurrency or bitcoin, but recently in the budget it has been announced that blockchain has been recognised as legal which can be good news for cryptocurrency in the upcoming fiscal years. It is true that cryptocurrency and blockchain go hand in hand. In blockchain technology, the distributed system runs in two different ways – public and private. In the private blockchain, there is no transparency for the government as all the credentials and authority remains with the potential owner. In a public chain, it is easy to view all the transactions made by the cryptocurrency account owner. This is the reason why the government of India is supporting the public blockchain platform which is beneficial for both the user as well as the Government.
Day by day, the digital currencies are facing a boom in some or other way. It has been incorporated in the financial system of many of the countries whereas in some countries it is still struggling for its recognition. Cryptocurrencies have a great potential in the upcoming years for becoming a global currency. In countries where cryptocurrency is not much recognized, are discussing ways to and issues to imply cryptocurrencies in their financial system. With the increased popularity of bitcoin and other cryptocurrencies, it may be possible that some countries might remove the ban on it as it would be beneficial for both government as well as the citizens.
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