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Country by Country: Is Cryptocurrency legal?

As I’m sure you can imagine, whenever a new paradigm-shifting technology comes into play, the governments of the world need to assess and analyze it for various reasons. Is it dangerous? Can it be used to commit crimes? Does it fit into a current regulatory scheme? Can we even regulate it? The questions are endless.

This happened with most major technology innovations in the past 50 years, but cryptocurrency is a special category, as it encompasses many different spheres of what most advanced countries attempt to regulate; such as internet browsing history and the transferring of money.

Because of this, many countries around the globe have taken vastly different approaches on handling the introduction of cryptocurrencies, but I believe that they can all be put into one of three categories; legal and regulated, legal and unregulated, and illegal.

Category 1: Legal and Regulated.

The majority of advanced countries are going to be in this category. This category recognizes the legitimate uses of cryptocurrency, but also accounts for the fact that it can be used for nefarious purposes, such as buying prohibited items from the dark web, or money-laundering. They also recognize cryptocurrency in order to properly collect taxes from it. Some major players in this category include:

  • United States

  • Canada

  • Japan

  • Germany

  • United Kingdom

  • China*

*China gets a footnote because it is currently “highly regulated”; while individual use is legal, commercial financial institutions are prohibited from dealing with cryptocurrency and Initial Coin Offerings (ICO’s) are banned entirely.

Category 2: Legal and Unregulated.

As the name suggests, countries in this category recognize the existence of cryptocurrencies, but have either made statements that they will not regulate them whatsoever, or their laws do not cover cryptocurrency use. Some examples include:

  • South Africa

  • Brazil

  • India

  • Denmark

  • Italy

  • Belgium

Category 3: Illegal.

A few countries have taken the extraordinary step of outlawing all use of cryptocurrencies, as it competes with their national currency and/or has been cited as being used for malicious purposes. The inclusive list of countries includes:

  • Bolivia

  • Ecuador

  • Kyrgyzstan

  • Bangladesh

The takeaway here is that cryptocurrency is generally safe to use (unless you live in one of the four countries in category 3!), so long as you are complying with your country’s laws, which for most people is probably just declaring them on your taxes.

Disclaimer: This article is made available by the publisher for educational purposes only, as well as to give you general information and a general understanding of the publisher’s interpretation of the law, not to provide specific legal advice. This information may not reflect the law in your jurisdiction. By using this site you understand that there is no attorney-client relationship between you and the publisher. All information in this article is the opinion of the publisher and may not reflect future developments in this field. This website should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.