For most people first getting into cryptocurrency, one of their greatest concerns is its legality. Crypto is accessible nearly everywhere with many countries recognizing it as an asset class. Some even impose taxes and deductions, depending on what country you are living in. However, others have banned the asset from use altogether.
Legality in the US
In the United States, cryptocurrency is legal. There are several cryptocurrency exchanges based in the U.S., and banks and other financial companies have begun offering programs that help people get their hands on crypto. Most of the interest has been in Bitcoin and Ethereum, though sentiment is changing.
For other cryptocurrencies, no law in the States says it is illegal to purchase or own them. If they are a currency, no imposition of regulation will occur from any government entity. The U.S. Securities and Exchange Commission (SEC) only goes after companies who are selling securities but are trying to label them as currency. It was this issue that destabilized the once-popular crypto Ripple and stopped the company plans of Telegram.
The U.S. government has stated that they have no interest in regulating Bitcoin or any other cryptocurrency in the near future. Some politicians even argue that it’s probably too late to try and control crypto’s growth and movement. One of the most debated topics is imposing taxes on cryptocurrency gains. If a law like that would pass, it would mean the U.S. further cements cryptocurrency’s legality.
Major corporations have begun adopting cryptocurrency as well. Visa has taken strides into creating a card that can connect to a user’s digital wallet to pay using crypto. Paypal has also begun accepting several major cryptos as a form of payment for multiple vendors. Adoption is beginning and only shows that banning cryptocurrency may be a poor decision.
Legality Around the World
Several countries have accepted cryptocurrency as an asset and have imposed taxes as a response. Some of the countries that have done so include:
- United Kingdom
- Denmark
- Spain
- Switzerland
- Israel
- Bulgaria
- Argentina
Most first-world countries accept the purchase and adoption of cryptocurrency within their countries. Countries like Canada and Luxembourg have either accepted or even encouraged crypto development. While some have concerns on its potential towards contributing to crime, the benefits outweigh the risk.
One development in crypto is an increased desire to adopt it as legal tender, with one of the most recent notable events being El Salvador’s declaration and legislation to make Bitcoin a legal tender. The government argues that cryptocurrency is how governments can rise from staggering debt.
The world bank has rejected the acceptance of Bitcoin as legal tender, though El Salvador’s move will not be the last of its kind. Other South American countries are also taking an interest and developing legislation.
Is There a Chance for Cryptocurrencies To Get Banned?
While some countries have closed their doors to crypto, they can overturn their decision. Only one country has been adamant and vocal about banning crypto. China, once a center of crypto mining, has reiterated its crypto ban many times. However, the reason for the ban isn’t because of similar concerns like other countries.
Instead, it is because China wants to create its own digital currency they can regulate. Interestingly, they use other utility cryptocurrencies but are careful to avoid labeling them as such.
Crypto presents more upsides than downsides. Its massive growth and potential mean that it can help spur economic growth while fighting against inflation. For a country like the US to suddenly change its stance and make crypto illegal would be detrimental to many things. Many powerful people in the US are into crypto, and they may lose their support in a sudden banning.
Sources:
Where are Bitcoin and cryptocurrencies legal and where are they not?, https://economictimes.indiatimes.com/markets/cryptocurrency/where-are-bitcoin-cryptocurrencies-legal-and-where-are-they-not/articleshow/82548574.cms
Regulation of cryptocurrency around the world, https://www.loc.gov/law/help/cryptocurrency/world-survey.php
China to shut down 90% of its Bitcoin mining capacity after local bans, https://www.globaltimes.cn/page/202106/1226598.shtml
El Salvador looks to become the world’s first country to adopt bitcoin as legal tender, https://www.cnbc.com/2021/06/05/el-salvador-becomes-the-first-country-to-adopt-bitcoin-as-legal-tender-.html
SEC vs RIpple, when will the lawsuit end?, https://financefeeds.com/sec-v-ripple-will-lawsuit-end/
