Last Updated: January 11, 2023
Where is Bitcoin legal?
Can we use it anywhere in the world?
SpendMeNot did extensive research on the topic.
And we created a map for you:
This Map Shows Bitcoin Regulation
The results may surprise you.
Bitcoin, the first digital currency to be created, has now been around for a decade. Though a relatively new medium of exchange, it has risen in popularity fast and it is now widely used across the world.
Cryptocurrencies are decentralized, so they aren’t regulated by a certain bank or monetary authority.
And since there is no universally accepted way of controlling cryptocurrencies, it is up to each government to pass legislation regarding Bitcoin regulation.
The thing is:
Some governments are opposed to this new form of currency and have banned it altogether. Others have accepted it and decided that it is better to regulate it.
This leaves us with the question:
How is Bitcoin regulated across the world?
Now that you know the basics of bitcoin legality by region, let’s get into more detail.
And by the way, if you’re planning to use BTC, you should definitely check out our list of companies that accept bitcoins.
Who Regulates Bitcoin in North America?
Bitcoin is becoming a fairly popular means of exchange in North America.
1.The US Federal Government accepts Bitcoin as a form of payment.
- You can use bitcoins to pay for goods and services in the US.
- Bitcoin mining is legal in the US.
- The Federal Government taxes virtual currencies.
Americans involved in the crypto market want to hear the answer to one vital question:
Is bitcoin legal in the US? And if yes, to what extent?
Well, they’ll be happy to hear that the Federal Government allows businesses to accept cryptocurrencies as a form of payment. According to guidance issued by The Financial Crimes Enforcement Network in 2013, you can use bitcoins to purchase goods and pay for services.
So, next time you’re shopping online, make sure that cryptocurrencies are listed as a payment method and go for it!
Besides using bitcoins for shopping, you can use them to make a profit, as Bitcoin mining is legal in the US. Just don’t forget to report any profits you make on your tax return since they are subject to taxation by the Federal Government! Those are the laws on a federal level, but now you probably want to know:
“How is bitcoin regulated on a state level?”
Regulations vary by state, with some having a more lax approach and others being more strict when it comes to trading with cryptocurrencies. It’s always best to check first.
2. Canada is one of the first countries to allow the use of cryptocurrencies.
- You can trade cryptocurrencies in Canada.
- Digital currencies are not an official currency in Canada.
- Cryptocurrencies are subject to taxation.
Bitcoin regulations in Canada are similar to those in the US. Canadian residents are legally allowed to buy and sell Bitcoin and even use cryptocurrencies to purchase goods and pay for services.
You can also find Bitcoin ATMs, both in the USA and Canada. You can use them to trade cash for bitcoins or vice versa. To do that, insert the cash into the machine, and the equivalent amount of bitcoins will be sent to your Bitcoin wallet.
Yet, despite all this, digital currencies are not considered legal tender in the country.
The official currency in Canada is the Canadian dollar. This means that financial institutions don’t manage or oversee digital currencies.
Here’s the thing:
In Canada, bitcoins are considered a commodity. Any profit you make by trading bitcoins has to be reported and will be subject to the Income Tax Act.
Who Regulates Bitcoin in South America?
Bitcoin is mostly accepted in South America.
3. Bolivia is the only country in South America where Bitcoin is illegal.
- Cryptocurrencies were banned in 2014.
- The head of the ASFI has compared them to a pyramid scheme.
Bolivia is the only country which has outright banned cryptocurrencies. In 2014, the Central Bank of Bolivia announced in an official statement that the usage of any type of currency which was not issued or regulated by the government or an authorized entity was illegal.
The ban includes Bitcoin and other cryptocurrencies, such as Peercoin and Primecoin. According to the Central Bank of Bolivia this ban was put in place to protect the national currency, as well as to protect the citizens from the risks of using unregulated currencies.
The head of the Financial System Supervision Authority ASFI has compared them to a pyramid scheme in a statement on an arrest related to cryptocurrencies.
4. Bitcoins are not prohibited in Argentina.
- No Bitcoin government regulation exists in Argentina.
- Cryptocurrencies aren’t considered legal tender.
Since no law has been passed in this country to prohibit the use of cryptocurrencies, they are legal.
Only currencies issued by the Central Bank of Argentina are considered legal tender. Bitcoins are legal property.
So, if you are wondering: “Is bitcoin mining legal in Argentina?”, then the answer would be yes.
As stated previously, the reason is the lack of regulations.
Who Regulates Bitcoin in Europe?
If you travel to Europe, you’ll probably have no trouble using bitcoins.
5. Bitcoin is legal in 45 countries in Europe.
- Exchanging Bitcoin for fiat currency is exempt from VAT in Ireland.
- Switzerland has two licensed cryptocurrency banks.
- The first Bitcoin ATM in Europe was installed in Bratislava, Slovakia.
Cryptocurrencies are legal in almost all countries in Europe. Additionally, some national governments are looking into the specifics of crypto regulation.
According to the EU VAT directive, the exchange of currencies used as legal tender is exempt from VAT. The Revenue Commissioners, the Irish government agency dealing with taxation, published a guide which stated that exchanging Bitcoin for fiat currency is exempt from VAT.
But as with many things, it’s Switzerland which is ahead of the game in terms of Bitcoin regulation. The Swiss Financial Market Supervisory Authority has decided to award banking licenses to two crypto banks, Sygnum and Seba.
And as the usage of cryptocurrencies is becoming normalized in Europe, more and more countries are installing Bitcoin ATMs. The first Bitcoin ATM in Europe was installed in the Slovak capital of Bratislava on December 8th, 2013. Other European countries which have joined the Bitcoin ATM club are the UK, Austria, Spain, the Czech Republic, Italy, Greece, and many more.
6. North Macedonia is the only European country where cryptocurrencies are illegal.
(Source: National Bank of the Republic of North Macedonia)
- Investing in cryptocurrencies is illegal in North Macedonia.
- The National Bank warns that crypto transactions are associated with criminal activities.
North Macedonia seems to be the only country in Europe where you might have Bitcoin-related legal issues. According to the country’s National Bank, investing in virtual currencies is illegal.
The Central Bank also warned its citizens that speculating in cryptocurrencies is a financial risk, as the platforms where these exchanges happen aren’t regulated by law.
Bitcoin Regulation in Asia
Asian countries have diverse approaches to cryptocurrencies.
7. Bitcoin is legal and regulated in Japan.
- Bitcoin is considered legal property in Japan.
- Cryptocurrencies are regulated by Japan’s Financial Services Agency (FSA).
Cryptocurrencies are mostly considered a gray area in Asia. Due to non-existing government cryptocurrency regulations, it is hard to tell when they cross the line between legal and illegal.
With one notable exception:
Unlike most Asian countries, Japan is a global leader when it comes to cryptocurrency regulations. Namely, cryptocurrencies are defined as legal property.
In case you are interested in the details or wondering who regulates Bitcoin in Japan, you would be happy to hear that there’s a government agency responsible for this. It is the Financial Services Agency (FSA), which has regulated the use of cryptocurrencies under the Payment Services Act.
Bitcoin exchanges are regulated by the Japanese Virtual Currency Exchange Association (JVCEA), which oversees compliance with cryptocurrency regulations.
8. South Korea and Pakistan are improving Bitcoin regulations.
- South Korea is imposing regulations on the transparency of crypto exchanges.
- Pakistan will regulate cryptocurrencies to fight financial crimes.
In addition to Japan, another East Asian country is working on imposing regulations regarding currencies. In South Korea, cryptocurrency exchanges are regulated by the Financial Intelligence Unit (FIU) under the Financial Services Commission (FSC). These regulations will increase the transparency of transactions. In turn, this will make money laundering more difficult.
Pakistan is also working on regulating cryptocurrencies in order to fight financial crimes, such as money laundering, tax evasion, and financing terrorism. Specifically, the Finance Action Task Force (FATF) recommended a Bitcoin government regulation.
9. China has banned cryptocurrency trading.
- China banned initial coin offerings (ICO).
- There were rumors of banning Bitcoin mining.
- China plans to launch a national cryptocurrency.
Yet, seeing how approximately 80% of cryptocurrency mining happens in China, we assume that cryptocurrency traders want to know:
“Is Bitcoin banned in China?”
Well, it all started with banning initial coin offerings (ICO). This is a funding process which uses cryptocurrencies. The reason for the ban was that unauthorized fundraising is illegal in China.
There was also a proposal to ban cryptocurrency mining because it wastes a lot of resources. The reason why most Bitcoin mining happens in China is due to the cheap electricity.
However, it seems that now China plans to launch its own national cryptocurrency. It is possible that the China cryptocurrency ban will be lifted when this happens.
Bitcoin Regulation in Australia and Oceania
Australia and New Zealand have taken decisive measures towards legalizing bitcoins.
10. Australia has legalized cryptocurrencies.
- Australia legalized cryptocurrencies in 2017.
- Cryptocurrencies are subject to taxation.
Cryptocurrencies have been legal in Australia since 2017. According to the Australian Taxation Office, Bitcoin and other cryptocurrencies are even subject to taxation.
Business dealing with digital currency exchange (DCE) has to be registered with the Australian Transaction Reports and Analysis Centre (AUSTRAC). This is to ensure that transactions are compliant with their regulations and to prevent financial crimes, money laundering, and financing terrorism.
So, if you are mining Bitcoin in Australia, don’t forget to register and pay your taxes!
11. Bitcoin is legal in New Zealand.
- Bitcoin can be used as a form of payment in New Zealand.
- Cryptocurrencies can be used as salary payments in New Zealand.
- Income in the form of cryptocurrencies is taxed.
New Zealand is clearly one step ahead of the rest of the world in terms of regulation of Bitcoin.
Check this out:
From September 1st, 2019, companies have the option to pay their employees in Bitcoin. Payments can be made in the form of cryptocurrencies provided that the cryptocurrency is pegged to a fiat currency and can be exchanged with a fiat currency.
In addition, an employment contract is needed. The payments will be subject to taxes, like any other income. This ruling does not apply to self-employed workers.
12. Samoa and Vanuatu don’t recognize Bitcoin as legal tender.
- A business license is required to promote cryptocurrencies in Samoa.
- Investing in cryptocurrencies is not encouraged by the Central bank of Vanuatu.
And while Australia and New Zealand are more lax with their regulations, the Samoan government doesn’t share the same sentiment. The Central Bank has warned citizens that Bitcoin is not recognized as legal tender in Samoa. Investing in cryptocurrencies is also not encouraged in the country.
However, cryptocurrency laws do exist in this small island nation. If business owners wants to promote cryptocurrencies in Samoa, they need a business license. And if they aren’t compliant with the Money Laundering Prevention Act, they can face fines and imprisonment.
Regulations in Vanuatu are similar to those in Samoa. According to the Reserve Bank of Vanuatu, Bitcoin is not recognized as legal tender, and neither are any other cryptocurrencies. The central bank of Vanuatu also warns against investing in cryptocurrencies, stating that they aren’t regulated. The only legal and official currency is the Vatu.
Bitcoin Regulation in Africa
The legality of cryptocurrencies varies considerably by country.
13. Bitcoin is legal in four African countries.
- Cryptocurrencies are legal in South Africa, Namibia, Zimbabwe, and Nigeria.
- South Africa doesn’t recognize Bitcoin as legal tender.
- A significant number of South Africans are cryptocurrency owners.
We can’t say that cryptocurrencies are outright legal in most countries in Africa. It is just that some countries, like South Africa, Namibia, Zimbabwe, and Nigeria haven’t regulated or banned them outright.
The South African Reserve Bank hasn’t changed its position on virtual currencies since 2014, stating that they aren’t supervised, overseen, or regulated. No cryptocurrency laws exist regarding the use and exchange of bitcoins. Since cryptocurrencies aren’t recognized as legal tender, they cannot be accepted as a form of payment.
Interestingly, this doesn’t seem to stop South Africans from owning bitcoins. According to an online poll, South Africa is among the top 5 countries with the most cryptocurrency owners.
14. Bitcoin is illegal in three African countries.
- Cryptocurrencies are banned in Algeria, Egypt, and Morocco.
- Algeria banned cryptocurrencies in 2017.
- Cryptocurrencies are prohibited under Islamic Law in Egypt.
Some African countries like Algeria and Egypt do have Bitcoin regulations, though. The purchase, trade, and possession of virtual currencies is prohibited by law in Algeria.
The Central Bank of Egypt has also warned about the risks of trading with cryptocurrencies. Additionally, Bitcoin is considered haram in Egypt – prohibited by Islamic Law. However, a new bill is on the way which will lift this cryptocurrency ban. The Central Bank of Egypt is expected to introduce a new cryptocurrency regulation.
The majority of the countries where Bitcoin is considered legal are located in the Americas and Europe. An existing Bitcoin regulation means that the specifics of using, trading, and mining Bitcoin have been legislated. Such is the case in the US, Switzerland, Ireland, Australia, and New Zealand.
Cryptocurrencies are also popular in some Asian countries like Japan and South Korea. Others are working on regulating them to prevent tax evasion, money laundering, and other illegal activities.
And while there are a few countries in Africa and Oceania where cryptocurrencies are accepted, they remain a gray area in most.