The greatest advantage of bitcoin is that it is not like fiduciary currency. This currency enables you to receive bitcoin to and from anywhere in the world so long as you have high-speed network connectivity.
It is very crucial to know when accepting bitcoin as a means of transaction, due to its flexibility and universal acceptance in major economies it has driven many countries to engage in this new form of a transaction at the comfort of your smartphones, unlike other current currencies which have geographical boundaries to access.
So long as the cryptocurrency stays in your bitcoin account it is absolutely hassle-free. The problem arises when you try to bring it into the real market for business transactions. The income tax, government regulations and authorization of transactions all come into play. Hence we see the limited use of bitcoin currency. Having said that major economies are now adopting it as their legal tenders.
Lets look at some of the countries which offer us what when it comes to bitcoin trading. And what regulations the financial institutions have marked in their respective countries.
El Salvador: On Tuesday 15th February this country adopted cryptocurrency for its official use alongside the US dollar, its position has attracted ruthless comments from the IMF. However, nothing is stopping President Nayib Bukele to form bitcoin as a legal tender.
Japan: Japan was the first country to have embraced bitcoin and made its transactions legal in its financial ecosystem. it is the first to set a board of regulations to more than 32 cryptocurrency exchanges and made bitcoin transactions tax-free. All the crypto exchanges are regularized under the Japanese Financial Services Agency (FSA).
United Kingdom: The UK considers cryptocurrency as a property and not a legal exchange. All bitcoins and other cryptocurrency transactions must register with the UK Financial Conduct Authority (FCA). UK bans of using cryptocurrency in trading. FCA has clear statutes on the virtual currency relating to Know Your Customer (KYC), anti-money laundering (AML) and combating financing of terrorism (CFT). On all profits made via crypto transactions, individuals have to pay capital gains tax.
United States of America: It being a nation of opportunities leveraged bitcoins in June 2021. The Internal Revenue Service took a major interest in the bitcoin frenzy and regularized laws for taxpayers. The Internal Revenue Service is a federal body that collects taxes and enforces tax laws in the US.
Canada: Canada is a growing bitcoin-friendly country and the citizens feel the same. It has over 86 bitcoin-accepting merchants who work in tandem with the official law. As of today, Cryptocurrency is not yet a legal tender. Only the notes and coins issued by the Royal Canadian Mint and Bank of Canada are authorized, it is still experimenting with token-based virtual currencies. Bitcoin is viewed as a commodity by the Canada Revenue Agency for the purpose of income tax. All transactions involving cryptocurrencies must register with the Financial Transactions and Report Analysis Centre of Canada(FINTRAC).
South Korea: This East Asian nation has a history of most sophisticated innovation and has achieved the same in cryptocurrency. South Korea accounts for about 10% of the world’s bitcoin trading. It authorizes the ownership and trading of cryptocurrency. In March 2020 South Korea passed a redrafting to the Act on the Reporting and Use of Specific Financial Transaction Information. The law became functional in March 2021 and further rules were extended towards AML and CFT to crypto traders.
European Union: EU recognizes cryptocurrencies and bitcoin as assets. Bitcoin is not completely illegal within Eu however the European Banking Authority warns the public and businesses to be aware of the risks in investing in the cryptocurrency.
Some countries have become very popular in the EU for cryptocurrency trading. These are Estonia, Slovenia, Georgia, Denmark, Netherlands.
Australia: The Australian Taxation Office views bitcoin and cryptocurrencies as financial assets. An interesting fact is that if an individual uses bitcoin for his/her personal use he/she will not be taxed in certain scenarios. You are liable to pay the capital gains tax should you convert the bitcoin to trade, sell, gift, or exchange it for fiat money. Records must be furnished for all bitcoin transactions.
Singapore: In this tiny yet notable country, there are a different set of laws surrounding bitcoins and cryptocurrencies. The exchanges and trading have been legalized under Singapore’s Payment and Services Act 2019.
