(After a decade, Bitcoin is officially recognized, and legalized in three countries. Yes, some countries have given Bitcoin as legal tender)
After various debates and controversies, three countries accepted Bitcoin as the legal payment system. They have passed a new law to adopt it as the legalized payment system.
- EI Salvador is the first country to accept Bitcoin as legal tender after an in-depth evaluation of its risks.
- After El Salvador, Central Republican Africa became the second country to adopt Bitcoin as the digital transaction system. Lawmakers of the Central Republic anonymously voted to legalize BTC and other well-known digital coins.
In May 2021, president Nayib Bukele announced Bitcoin as the country’s digital payment system with other Fiat currencies.
Since then, BTC has been a legal tender alongside other coins in El Salvador. Obed Namsio, a chief from the nation, called the move a decisive step that would open new opportunities for the country’s citizens.
Adopting BTC as a legal tender
El Salvador, a country in Central America, allowed its native citizens to make transactions in the digital currency BTC in November 2021. As a result, it has been one of the first countries to accept BTC as an official currency, except for the U.S. dollar and other coins.
However, the country is opposed by the IMF ( international monetary fund ) to changing its decision as it will create financial risks and liabilities. According to the report, Texas can also pass a legal tender to adopt it as the payment network.
Moreover, it is a rapidly volatile asset whose prices can go higher and lower anytime. It also raises questions about why countries like CAR, the world’s poorest and least-developed, are adopting BTC as the digital payment system.
Cryptocurrency space is rapidly evolving with the introduction of new rules. While keeping up with every update is challenging, some can be very helpful. Crypto trading platforms are legalized in countries like the U.S., where armed with decentralized power, cryptocurrency is the future of finance.
Unlike paper currencies, Bitcoin is a digital currency based on the whole crypto infrastructure. It is designed to act as cryptocurrency and help in digital payment services. It’s an innovative project which helped digital projects in the long run.
The crypto world is buzzing with the innovation of BTC. It has opened the door for many other crypto blockchain projects such as ethereum, Cardano, Solana, etc.
We all know that it is one of the highly volatile cryptocurrencies, which often confuses investors when it comes to making it a long-term investment option.
Now Arizona, a southwestern U.S. state Senator, initiated a bill to accept BTC as a legal tender. The bill is proposed to adopt Bitcoin as the official coin for legal transactions.
What is Bitcoin?
BTC is a digital payment system that works without any central regulation. The process involved in creating Bitcoin is called mining. In contrast to traditional coins, Bitcoin decentralized means no bank or major party is involved in its operation. Furthermore, it means no central authority controls this coin and it can not be manipulated easily.
BTC is secured by cryptography. It is available on various crypto exchange platforms and rewarded to crypto miners.
Where did BTC come from?
BTC was introduced in 2009 by a pseudonymous group or person named Santoshi Nakamoto. Since then, BTC has become a well-known currency in the global economy. But even now, we are still determining who is behind the origin of it.
As a peer-to-peer digital currency, Bitcoin brought financial revolution and the concept of decentralization to the world.
Every transaction is recorded on the blockchain and secured via cryptography.
Countries Where Bitcoin Is Legal/illegal
Bitcoin can be used as a digital payment system and to trade worldwide. As a result, many countries proposed the laws this year.
It is not regulated by any central entity or banks to make economic decisions. However, the coin also concerns the countries where it is legalized.
While some legislators and lawmakers don’t support BTC as the official currency because of its lack of regulation and vulnerabilities, countries like EI Salvador and the Central African Republic still understand the limitless potential of Bitcoin and thus adopt it as a legal currency.
Generally, in any country, the regulators and central banks decide what legal tender should or should not be. It means whatever they value or choose to deem fit according to the country’s condition is passed as legal tender.
The legal status of cryptocurrencies varies in different countries. For example, El Salvador became the first country to accept Bitcoin as legal tender in 2021. So if you want to sell, buy or hold BTC, first understand the legal status in your country. So here is the list of countries where the use of BTC is legal/illegal.
Central African Republic
Central African Republic is the first country in Africa and the second country worldwide to accept Bitcoin as the official currency.
Algeria
Algeria, a North African country in 2018, introduced a law to consider Bitcoin transactions illegal. The government currently prohibits using it in any form of transaction or trading.
Bangladesh
Bangladesh is also where digital asset usage is prohibited and considered illegal. Under the country’s money laundering and terrorist financing laws, the use of Bitcoin is highly prevented and punishable by 12 years.
Bolivia
There is a complete ban in Bolivia on any usage of cryptocurrencies. In 2014, Bolivia made usage of the crypto illegal. They enforced the regulation after the investors lost hard-earned money.
China
In September 2021, China declared that any crypto transactions or usage is illegal, putting a blanket ban. However, all cryptocurrencies, including Bitcoin, Ethereum, and Tether, can be traded inside China, said the people’s bank of China.
Cuba
Cuba is also one of the top countries that banned the usage of cryptocurrencies.
Indonesia
Indonesia also banned the usage and transaction of BTC and other cryptocurrencies in any form of payment.
India
India also put forward a bill in September 2022 about the regulation and usage of cryptocurrency. The bill brought attention to prohibiting the use of cryptocurrencies.
Russia
In January 2022, Russia also announced that using cryptocurrencies is illegal.
United States
The United States is a country where cryptocurrencies and Bitcoin usage is legal. According to the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN), Bitcoin holds the same value as fiat currencies and can also be an alternative to real currency.
The international revenue system also categorized Bitcoin under the taxation system. As a result, financial Institutions are working to bring some effective regulations to make cryptocurrencies secure.
Conclusion
Russia and the U.S. will be the following countries to accept Bitcoin, a wholly legalized coin and payment system. As the crypto winter continues, we can accept better developments in crypto adoption.
However, if you are trading in BTC, you should know its risks. Salvador became the first country to pass Bitcoin as legal tender, but we still need to wait until other nations regulate it.
FAQs
Q. Is Bitcoin legal in any country?
Ans. Bitcoin is legal in EL Salvador and the Central African Republic, while the U.S. may come to this list anytime.
Q. Why is the Bitcoin ban in many countries?
Ans. Some countries welcome Bitcoin, but many countries are worried because of its volatile and decentralized nature. In contrast, some have a threat that it may affect the monetary system and support activities like money laundering and terrorism.
Q. Why are the governments against Bitcoin?
Ans. For now, the government has some challenges, and that’s why they are against Bitcoin. The challenges are that it has no regulation, criminals use it, and it also helps citizens circumvent capital controls.
Q. Will Bitcoin ever be regulated?
Ans. Bitcoin regulation by CFTC and SEC is inevitable, which can come at any time and will benefit its value. Some people are still against it, but the price will rise like a rocket if regulation passes.
