Bitcoin ushered in a new era for cryptocurrencies as it is the first centralized virtual currency to ever be invented that has achieved numerous accomplishments. Most notably, it entered a bull market cycle which impacted the growth of various other cryptocurrencies. So, not only investors and businesses were amazed by the potential of cryptocurrencies and Bitcoin, but also governments around the world realized that they needed to regulate the growth of the crypto market in their countries.
However, not all governments have a positive outlook when it comes to the regulation of Bitcoin and crypto. In this article, we’ll explore the relationship between different governments and Bitcoin.
What is Bitcoin
The main appeal of Bitcoin is that it is a distributed virtual currency that is not issued by any government or central bank. The Bitcoin tokens are computer generated by the miners (users on the network) who are involved in the mining process, which encompass approving BTC transactions and generating new BTC on the network.
This is a crucial aspect that makes Bitcoin an attractive asset because it is not impacted by any decisions that can influence the traditional currencies and assets like financial crisis, social unrests, unemployment, and other events.
El Salvador is the first country to make Bitcoin an official legal tender in June 2021. President Nayib Bukele approved this decision, and it also pushed to formally accept BTC as a payment option. This means that you can use BTC in El Salvador to make payments, and it is legally adopted as a tender.
Since Bitcoin achieved a value of over $60,000 during its bull cycle, there are a lot of countries that want to accept BTC transactions in the public sector. In fact, as of 2021 in Argentina, BTC payments are accepted for transit fees. It’s also a country where Bitcoin mining is quite popular, and there are a lot of Bitcoin mining farms and pools.
If you also want to invest in Bitcoin, you can quickly register on a reliable online trading site. But, what’s more, there are automated trading sites like BitcoinDigital, where you are able to trade BTC for other currencies. The great advantage of using an automated trading side for investing is that the trading process is facilitated automatically. So, you don’t have any substantial costs regarding your time or effort for trading. You only need about $250 to register on the site.
The European Union
The European Union, since 2015, has declared buying and selling virtual currencies as a supply of services and cryptocurrenices are not charged VAT (value-added tax) in EU member states. There are other member states that have different positions regarding BTC, but generally, cryptocurrencies are accepted in most EU states.
For example, in Germany, BTC is considered a legal currency; however, it is taxed based on its use. It just means that it is taxed differently based on its use on exchange sites, in Bitcoin mining, Bitcoin transactions of businesses, and other purposes. Another example is Finland, where BTC is considered a commodity instead of a virtual currency, and it is also exempt from VAT tax.
Bitcoin is illegal in China mainly because the government of China is working to develop its own digital currency, which is another virtual version of its national currency, the E–yuan. Other countries like Russia made it illegal when it comes to using Bitcoin for purchases. But it isn’t regulated in other aspects like an investment, for example.
However, most governments around the world have a positive outlook regarding cryptocurrencies, and they are looking to regulate them in a way that is beneficial for their country. So, we can expect in the future for BTC and other virtual currencies to be used regularly for offline and online shopping as well as investments.