With so much already written, explained and explored about cryptocurrencies the world has started taking them seriously. The exponential demand and growth of certain altcoins have made them the first and the last choice of investment. It has been declared by experts that this is the “Future Gold” and an era of digital currency has begun. Acceptance of cryptocurrencies has risen and that has given birth to almost 900 such currencies across the globe.
Though there are certain states and institutions, like financial institutions and banks, which still do not approve them as legal tenders. In spite of that Cryptocurrencies have traveled a long distance in getting themselves a legal entity. Following are the states which recognize Cryptocurrencies in various legalities-
Part of the Channel Islands this state is believed to be the first state to allow Cryptocurrency. Since then they have supported them in such a way that it seems they are the top contender for becoming the hub of all Cryptocurrencies.
One of the top ten strong economies of the world has been friendly with cryptocurrencies since June 2014. The Japanese Financial Services Agency declared that Japan should be the first and the safest in the world for the use of cryptocurrencies. Japanese Authority of Digital Assets (JADA) even formulated “Code of Conduct” format for Cryptocurrency only platforms.
3. The United States of America
States like New York have created “BitLicense” for the use of Cryptocurrency-Bitcoin. Issued by the “New York State Department of Financial Services (NYSDFS)” it is used as the business license of altcoins. With many guidelines and rules, it is currently limited to New York and for residents of NY.
States like Texas and the 5th most populous state Illinois have allowed free trading of cryptocurrencies and do not levy any tax or any regulations under money transmission regulations.
With a robust economy of USD2.564 trillion, the Australian Government has made use of Cryptocurrency legal. The trading and mining of Cryptocurrencies are legal and the government is even formulating regulations to levy capital gains taxes and VAT taxes on its usage.
5. United Kingdom
The UK government is another Cryptocurrency friendly state and treats them as “Private Money” or currency. No VAT is added on them and they are not treated as assets. They have rather, via the HM Treasury, asked for data on digital altcoins so as to decide “Who”, “When” and “Where” regulations can be implemented. This clearly shows that the UK is playing a safe game by neither accepting it completely nor deciding against the digital currency.
Since 2013, The Federal Financial Supervisory Authority in Germany has declared cryptocurrencies as legal financial instruments and are considered to fall under the category termed as- Sctimt. The use/trading of Cryptocurrency is subject to capital gains taxes. They also come under sales tax and VAT.
The Singapore government and the Monetary Authority of Singapore have declared cryptocurrencies as goods purchased to buy goods. Therefore they are subject to specific taxes. They even asked the exchanges and ATM providers to Green-list them.
Since 2014 the government has declared them as hybrid money and also levied 10% tax when they are used as currency.
The state with a population of just 5.5million has a good number of Bitcoin Vending machines. Cryptocurrency is categorized under financial services and hence are exempted from any VAT.
The act on Financial Supervision of Netherlands does not regulate cryptocurrencies and that is why in this Cryptocurrency friendly state there are cities which are termed after them, like – the “Bitcoin City”. This name is given to the city of Arnhem which has over hundred merchants doing business on Bitcoin. You can purchase from bicycle to gas to dental services using Bitcoin.
Although the Indian government is still to legalize the use of Cryptocurrencies, it is keeping an eagle’s eye view. Off late, the news of Indian government coming with their own Cryptocurrency by the name of “Lakshmi” has also surfaced. All this shows highlights that people in the country are familiar and willing to accept cryptocurrencies, it’s just a matter of time.
There are few countries like Ukraine and Russia who do not approve cryptocurrencies but with passing time and pressure of staying ahead in the economic race, they also will gradually accept them. There are others who are watchful and are waiting for others, like Belgium and Greece. These states are waiting and are ready to follow the European wide guidance.
Sooner or later, Cryptocurrencies will reach a point where they will be recognized as parallel legal tenders and then eventually complete recognition as Currency across the world. With such bright future investing today n Cryptocurrency, without much hue and cry of their legality, will be a smart and proactive step.