Legality of bitcoin by country

Australia

In December 2013, the governor of the Reserve Bank of Australia (RBA) indicated in an interview about bitcoin legality stating, "There would be nothing to stop people in this country deciding to transact in some other currency in a shop if they wanted to. There’s no law against that, so we do have competing currencies."

Australia classifies bitcoin as property and therefore purchases made with bitcoin as barter. The Australian government has released tax guidelines for individuals and businesses and claims that bitcoin is subject to goods and services tax (GST) and capital gains tax. However, in March 2016 the treasurer indicated that GST on bitcoin would be dropped.

In 2016 Justice Minister Michael Keenan indicated that Australia would be seeking to further regulate bitcoin in an effort to prevent money laundering and terrorist financing via the digital currency.

China

While private parties can hold and trade bitcoins in China, regulation prohibits financial firms like banks from doing the same.^:China On 5 December 2013, People's Bank of China (PBOC) made its first step in regulating bitcoin by prohibiting financial institutions from handling bitcoin transactions. In a statement on the central bank’s website the PBOC said financial institutions and payment companies cannot give pricing in, buy and sell bitcoin or insure bitcoin-linked products. On 16 December 2013 it was speculated that the PBOC had issued a new ban on third-party payment processors from doing business with bitcoin exchanges, however a statement from BTC China suggests this isn't accurate, and rather payment processors had voluntarily withdrawn their services. On 1 April 2014 PBOC ordered commercial banks and payment companies to close bitcoin trading accounts in two weeks. Trading bitcoins by individuals is legal in China. On 9 February 2017, multiple bitcoin exchanges in China delay or pause bitcoin withdraw service, with or without announcement. Some of the announcements, if not all, claim that regulation activities have been or are to be taken. News resources also show that, although such activities were carried out by PBOC, they were not done via legal approaches, but by "appointment" instead. None of the exchanges presented or have claimed to receive any lawful paperwork.

Czech Republic

On 25 September 2013, Analytical department of Ministry of Finance of Czech Republic published legal guidance for buying and selling digital currencies. Transactions worth more than 1.000 EUR are considered "AML high-risk" in accordance to § 6 para. of Act No. 253/2008 Code. Transactions worth more than 15.000 EUR are considered "AML suspicious" in accordance to § 18 of Act No. 253/2008 Code.

The Czech National Bank (CNB) stated on February 10, 2014:

Denmark

On 17 December 2013, Denmark's Financial Supervisory Authority (FSA) has issued a statement that echoes EBA's warning. In addition, FSA says that doing business with bitcoin does not fall under its regulatory authority and therefore FSA does not currently prevent anyone from opening such businesses. FSA's chief legal adviser says that Denmark might consider amending existing financial legislation to cover virtual currencies.

Ecuador

The National Assembly of Ecuador banned bitcoins including other decentralized digital/crypto currencies. Due to the establishment of a new state-run electronic money system. Ecuador's new project would be controlled by the government and tied directly to the local currency—the dollar. Users will be able to pay for select services and send money between individuals. This will begin in mid-February 2015. "Electronic money is designed to operate and support the monetary scheme of dollarization," economist Diego Martinez, a delegate of the President of the Republic to the Board of Regulation and Monetary and Financial Policy.

Estonia

The Estonian Central bank refers to bitcoin as a "problematic scheme" and "Ponzi scheme". The Estonian Financial Intelligence Unit stated that every person who exchanges any amount of bitcoin requires a license and that every person who trades more than 1000 Euro per month needs to be met with in person and a copy of id made and kept.

European Union

According to the European Central Bank, traditional financial sector regulation is not applicable to bitcoin because it does not involve traditional financial actors. Others in the EU have stated, however, that existing rules can be extended to include bitcoin and bitcoin companies.

The European Central Bank classifies bitcoin as a convertible decentralized virtual currency. In July 2014 the European Banking Authority advised European banks not to deal in virtual currencies such as bitcoin until a regulatory regime was in place.

In October 2015, the European Court of Justice ruled that bitcoin transactions are exempt from consumption tax similarly as traditional cash. According to judges, the tax shouldn’t be charged because bitcoins should be treated as a means of payment.

Finland

Ruling 034/2014 by the Finnish Central Board of Taxes (CBT) stated that commission fees charged on bitcoin purchases by an exchange market were, under the EU VAT Directive, banking services and therefore VAT exempt. This is because the court classified bitcoins as payment instruments - whereas most countries treat their use as an unregulated method for the exchange of goods, or even as a crime.

France

The French Ministry of Finance issued regulations on July 11, 2014 requiring:

1) Identity verification during the opening of, withdrawal from, or deposit to a virtual currency account.

2) Capital gains are taxable as business profits (BIC) or as non-commercial profits (BNC), depending on if the activity is undertaken habitually or not. Assets held in bitcoin must also be reported pertaining to the wealth tax (ISF).

3) Proposed ceiling on payments consistent with current rules for cash payments.

4) Conformance with regulations at the European Union level for bitcoin exchanges pertaining to identity verification of transaction participants and anti-money laundering.

G7

In 2013 the G7's Financial Action Task Force issued the following statement in guidelines which may be applicable to companies involved in transmitting bitcoin and other currencies, "Internet-based payment services that allow third party funding from anonymous sources may face an increased risk of [money laundering/terrorist financing]." They concluded that this may "pose challenges to countries in [anti-money laundering/counter terrorist financing] regulation and supervision".

Germany

On 19 August 2013, the German Finance Ministry announced that bitcoin is now essentially a "unit of account" and can be used for the purpose of tax and trading in the country. It is not classified as a foreign currency or e–money but stands as "private money" which can be used in "multilateral clearing circles", according to the ministry.

Hong Kong

On 16 November 2013, Norman Chan, the chief executive of Hong Kong Monetary Authority (HKMA) said that bitcoins is only a virtual commodity. He also decided that bitcoins will not be regulated by HKMA. However, the authority will be closely watching the usage of bitcoins locally and its development overseas.

Iceland

The Icelandic Central Bank confirmed that "it is prohibited to engage in foreign exchange trading with the electronic currency bitcoin, according to the Icelandic Foreign Exchange Act".

India

In June 2013, the Reserve Bank of India (RBI) issued a notice acknowledging that virtual currencies posed legal, regulatory and operational challenges. In August 2013, a spokesperson wrote in an email that bitcoin was under observation.

On 24 December 2013, the Reserve Bank of India issued an advisory to the Indian public to be cautious in buying or selling of virtual currencies, including bitcoin. Following the announcement bitcoin operators in the country began suspending operations.

The first raid in India was undertaken a couple of days later in Ahmedabad by the Enforcement Directorate (ED) on the office of the website, buysellbit.co.in, that provided a platform to trade in this virtual currency. The preliminary investigations found it to be in violation of the Foreign Exchange Management Act (FEMA).

On 28 December 2013, the Deputy Governor of the RBI, K. C. Chakrabarty, made a statement that RBI had no plans to regulate bitcoin.

Indonesia

On 21 December 2013, Difi Ahmad, the executive director of communication at Bank Indonesia (BI) said that bitcoin is a potential payment method but could potentially be used in scams and money laundering operations. Since it is not regulated by banks, it has its associated risks. The central bank of Indonesia is currently studying bitcoin and they have no plans to issue regulations on it.

On 16 January 2014, Ronald Waas, deputy governor of Bank Indonesia said that bitcoin usage would break a number of laws including Undang-undang Bank Indonesia (Bank Indonesia Act), Undang-undang Informasi dan Transaksi Elektronik (Information and Electronic Transaction Act), and Undang-undang Mata Uang (Monetary Act). For example, Undang-undang Mata Uang states that Rupiah is the only legal tender in the country. He also strongly advised the public against using bitcoins because security of bitcoins transactions are not guaranteed. However, currently BI does not have detailed policies of regulating or banning bitcoins usage.

On 6 February 2014, Bank Indonesia is stating that bitcoin and other virtual currencies are not currencies or legal tender in Indonesia. The people are urged to exercise caution towards bitcoin and other virtual currencies. All risks regarding ownership or use of bitcoin are borne by the owner or user of bitcoin and other virtual currencies. In September 2014, deputy governor of BI discourage the public against using bitcoin as a payment method.

Israel

On February 19, 2014, the Bank of Israel issued a public service announcement detailing some of the risks associated with using bitcoin.

On August 11, 2014, the Bank of Israel announced the formation of an inter-bureau team exploring the bitcoin issue, including representatives of the Bank of Israel, Ministry of Finance, Israel Money Laundering and Terror Financing Prohibition Authority, Israel Tax Authority, Israel Securities Authority and more. As of March 2015, no official guidelines regarding bitcoin have been published.

The Israel Bar Association considers the virtual currency an appropriate form of payment for attorneys.

Japan

On 7 March 2014, the Japanese government, in response to a series of questions asked in the National Diet, made a cabinet decision on the legal treatment of bitcoins in the form of answers to the questions. The decision did not see bitcoin as currency nor bond under the current Banking Act and Financial Instruments and Exchange Law, prohibiting banks and securities companies from dealing in bitcoins. The decision also acknowledges that there are no laws to unconditionally prohibit individuals or legal entities from receiving bitcoins in exchange for goods or services. Taxes may be applicable to bitcoins.

According to Nikkei Asian Review, in February 2016, "Japanese financial regulators have proposed handling virtual currencies as methods of payment equivalent to conventional currencies".

Jordan

The Central Bank of Jordan prohibits banks, currency exchanges, financial companies, and payment service companies from dealing in bitcoins or other digital currencies. While it warned the public of risks of bitcoins, and that they are not legal tender, bitcoins are still accepted by small businesses and merchants.

Lithuania

Bank of Lithuania released a warning on 31 January 2014 that bitcoin is not recognized as legal tender in Lithuania and that bitcoin users should be aware of high risks that come with the usage of it.

Luxembourg

The Commission de Surveillance du Secteur Financier (CSSF) issued a communication in February 2014 stating the country's position regarding "virtual currencies": "virtual" currencies are considered as money, since they are accepted as a means of payment of goods and services by a sufficiently large group of people.

More specifically, they are scriptural money as opposed to cash in the form of banknotes and coins. The scriptural nature does not require a tangible writing, similarly to electronic documents or signatures that do not require paper. Virtual currencies may thus be electronic money, but not necessarily within the meaning of the European Directive 2009/110 which provides for a definition of electronic money limited to its own scope.

The issuing of virtual currencies is not regulated from a monetary point of view. On the other hand, the CSSF reminds that nobody can be established in Luxembourg to carry out an activity of the financial sector without an authorisation by the Minister of Finance and without being subject to the prudential supervision of the CSSF (Article 14 of the law of 5 April 1993 on the financial sector).

Therefore, the potential interested persons who would like to establish themselves in Luxembourg in order to carry out an activity of the financial sector (as, for instance, the issuing of means of payments in the form of virtual or other currencies, the provision of payment services using virtual or other currencies, the creation of a market (platform) to trade virtual or other currencies) shall define their business purpose and their activity in a sufficiently concrete and precise manner to allow the CSSF to determine for which status they need to receive the ministerial authorisation.

The CSSF encouraged these individuals to contact its officials about facilitating digital currency-related commerce in the country, and suggested it will operate on a case-by-case basis with its regulatory decisions.

The first Luxembourg "BitLicence" has been granted on 12 October 2015 to SnapSwap. The CSSF explained in May 2015 that a few companies were in the process of acquiring a similar licences, further adding it was possible to get "Your licence within six months".

Malaysia

On 4 November 2013, Bank Negara Malaysia (BNM) met with local bitcoin proponents to learn more about the currency but did not comment at the time. BNM issued a statement on 6 January 2014 that bitcoin is not recognised as a legal tender in Malaysia. The central bank will not regulate bitcoin operations at the moment and users should aware of the risks associated with bitcoin usage.

Norway

The Norwegian Tax Administration stated in December 2013 that they don't define bitcoin as money but regard it as an asset. Profits are subjected to wealth tax. In business, use of bitcoin falls under the sales tax regulation.

Philippines

The Central Bank of the Philippines (BSP) released BSP Circular No.944 entitled "Guidelines for Virtual Currency (VC) Exchanges," to provide clarity on the legality of bitcoin exchanges. In the document, BSP clarified that it will not endorse bitcoin as a currency as it isn’t issued by a central bank. However, considering the benefits of bitcoin as payment and remittance networks, BSP intends to regulate bitcoin and bitcoin startups as remittance companies. Anti-Money Laundering (AML) and Know Your Customer (KYC) policies are set to be tightened for local bitcoin exchanges and companies.

Poland

Szymon Woźniak of the Ministry of Finance made an official announcement on the legality of bitcoin on 18 December 2013 at a conference at the Warsaw School of Economics stating that the Ministry of Finance does not consider bitcoin illegal and does not want to hinder its development. He clarified that while not illegal, bitcoin cannot be considered legal tender, and, in the light of the directives of the European Union, it is neither electronic money. As of January 27, 2015 several banks have closed accounts of clients trading bitcoin, and indicated "presumption of criminal offense" as the cause, with "criminal offense" presumably being "cryptocurrency trade".

Russia

As of November 2016, bitcoin is not illegal according to a Russian federal tax service letter.

CNBC reported that bitcoin was illegal in Russia in 2014, as did the European Parliament.^:Russia Various Russian authorities and organizations have spoken out or taken actions against bitcoin. In early 2015, Russia’s media regulator blocked several bitcoin-related websites, and a Russian state-owned media outlet reported that according to "the [Russian] Central Bank... bitcoin usage [is] illegal under Russian federal law," and in February 2014, the Russian Prosecutor General’s Office was quoted as saying, "Cyber currencies... including the most well-known, bitcoin, are money substitutes and cannot be used by individuals or legal entities." In 2014 the Bank of Russia issued a statement on bitcoin usage in which it was characterized as money substitute banned in Russia. In February 2014, Russia's Prosecutor General's Office claimed that bitcoin is a money substitute and "cannot be used by individuals or legal entities". In September 2014, Deputy Finance Minister Aleksey Moiseev announced that a law will be passed by Spring 2015. In July 2016, Deputy Finance Minister Aleksey Moiseev announced that the new law will define bitcoin as a foreign currency. Russians will be able to buy bitcoins and use them abroad. He is also expected that the new law will pass by the end of 2016.

In October 2016 the Federal Tax Service of Russia issued the letter No. ОА-18-17/1027 “On the measures regarding the exercise of control over the circulation of crypto currencies” (the Letter). This Letter may be viewed as a turning point that will change the government’s approach to the crypto currencies in the Russian Federation. It can be regarded as the first official document that comments on the legal status of crypto currencies. the Federal Tax Service of Russia addresses its letters to all lower-level fiscal authorities. They in turn tend to align their operations with the official position of the Federal Tax Service. Therefore, the Letter may influence the circulations of crypto currencies in Russia greatly by setting the regulatory framework – an approach that has been used in many other countries.

Singapore

On September 22, 2013, the Monetary Authority of Singapore (MAS) warned users of the risks associated with using bitcoin stating "If bitcoin ceases to operate, there may not be an identifiable party responsible for refunding their monies or for them to seek recourse" and in December 2013 stated "Whether or not businesses accept bitcoins in exchange for their goods and services is a commercial decision in which MAS does not intervene" In January 2014, the Inland Revenue Authority of Singapore issued a series of tax guidelines according to which bitcoin transactions may be treated as a barter exchange if it is used as a payment method for real goods and services. Businesses that deal with bitcoin currency exchanges will be taxed based on their bitcoin sales.

Slovenia

On December 23, 2013 the Slovenian Ministry of Finance made an announcement stating that bitcoin is neither a currency nor an asset. There is no capital gains tax chargeable on bitcoin, however bitcoin mining is taxed and businesses selling goods/services in bitcoin are also taxed.

Slovakia

The National Bank of Slovakia (NBS), stated that bitcoin does not have the legal attributes of a currency, and therefore does not fall under national control. European legislation, including the Slovak law, does not define the activities associated with virtual currency. Such activities are not regulated and supervised by the National Bank of Slovakia or the European Central Bank. At the same time NBS points out that any legal person or natural person in the Slovak Republic shall not issue any notes or any other coins. Unlawful manufacturing of banknotes and coins and putting them into circulation is punishable by law. In this context, NBS points out that virtual currencies have not a physical counterpart in the form of legal tender and participation in such a scheme (virtual currency) is at your own risk. Exchanges or purchases of virtual currencies represent the business risk of investors and investors' money are not protected. For any compensation of losses caused by such exchanges or purchases there is no legal entitlement.

South Africa

The South Africa Reserve Bank Position Paper on Virtual Currencies issued on 3 December 2014 came to 3 conclusions:

1. The Bank does not oversee, supervise or regulate the Virtual Currency (VC) landscape, systems or intermediaries for effectiveness, soundness, integrity or robustness. Consequently, any and all activities related to the acquisition, trading or use of VCs (particularly Decentralized Convertible Virtual Currencies - DCVCs) are performed at the end-user‟s sole and independent risk and have no recourse to the Bank.

2. Given the current landscape and information currently available, the Bank contends that VCs pose no significant risk to financial stability, price stability or the National Payment System. However, end-users, whether individuals or businesses that accept VCs and businesses involved in the VCs ecosystem, are cautioned that any activities performed or undertaken with VCs are at their sole and independent risk.

3. In line with the Bank‟s position that regulation should follow innovation, the Bank continues monitoring developments in this regard and reserves the right to change its position should the landscape warrant regulatory intervention.

South Korea

There are no laws in South Korea regulating the use of bitcoin at present.^{:South Korea} On December 12, 2013, the president of the Bank of Korea recommended at a press conference that bitcoin be regulated in the future.

Sweden

The Swedish jurisdiction is in general quite favorable for bitcoin businesses and users as compared to other countries within the EU and the rest of the world. The governmental regulatory and supervisory body Swedish Financial Supervisory Authority (Finansinspektionen) have legitimized the fast growing industry by publicly proclaiming bitcoin and other digital currencies as a means of payment. For certain businesses interacting with fiat (mainly exchanges) the current regulation dictates that an application for approval/license must be filed and all the AML/CTF and KYC regulations applicable to more traditional financial service providers must be followed.

Switzerland

On 5 December 2013 a proposal was put forth by 45 members of the Swiss Parliament for digital sustainability (Pardigli), that calls on the Swiss government to evaluate the opportunities for utilization of bitcoin by the country’s financial sector. It also seeks clarification on bitcoin’s legal standing with respect to VAT, securities and anti-money laundering laws.

In response to the parliament postulates, the Swiss Federal Council issued a report on virtual currencies in June 2014. The report states that since virtual currencies are not in a legal vacuum, the Federal Council has concluded that there is no need for legislative measures to be taken at the moment.

Taiwan

While bitcoin itself is not illegal here, approvals for bitcoin ATMs have been refused.^:Taiwan

On 6 December 2013, Perng Fai-nan said that bitcoin is only used in certain communities. Besides, he also opined that the value of bitcoin is a bubble and is highly volatile. Therefore, he advised the public against the speculation of bitcoins to prevent making a loss during the process. The central bank is closely watching the development of bitcoin and plan to impose regulations in the future.

On 31 December 2013, Financial Supervisory Commission (Republic of China) (FSC) and CBC issued a joint statement which warns against the use of bitcoins. It is stated that bitcoins remains highly volatile, highly speculative, and is not entitled to legal claims or guarantee of conversion.

On 5 January 2014, FSC chairman Tseng Ming-chung stated that FSC will not allow the installation of bitcoin ATM in Taiwan because bitcoin is not a currency and it should not be accepted by individuals and banks as payment.

However, despite this, three of the four major convenience store chains in Taiwan make available bitcoin purchases through their kiosk systems, and the largest chain now allows bitcoin to be used for purchases.

Thailand

In 2013, the Thai monetary authority, the Bank of Thailand, "issued a preliminary ruling that using bitcoins as described was illegal." A bitcoin startup denied a business license was reportedly told that "buying and selling bitcoins, using bitcoins to buy or sell goods and services, and transferring bitcoins in and out of Thailand were all currently illegal."

Turkey

Bitcoin is not regulated as it is not considered to be electronic money according to the law.^:Turkey

United Kingdom

Bitcoin is treated as 'private money'. When bitcoin is exchanged for sterling or for foreign currencies, such as euro or dollar, no VAT will be due on the value of the bitcoins themselves. However, in all instances, VAT will be due in the normal way from suppliers of any goods or services sold in exchange for bitcoin or other similar cryptocurrency. Profits and losses on cryptocurrencies are subject to capital gains tax.

United States

The U.S. Treasury classified bitcoin as a convertible decentralized virtual currency in 2013. A Magistrate Judge of a Texas U.S. District Court classified bitcoin as a currency. A June 2014 U.S. government auction of almost 30,000 bitcoins, which the U.S. Marshals Service seized in October 2013 from Silk Road, was said to increase legitimacy of the currency.

The U.S. Government Accountability Office (GAO) recommended in May 2013, that the Internal Revenue Service (IRS) formulate a tax guidance for bitcoin businesses. End of March 2014, in time for 2013 tax filing, the IRS issued a guidance that it considered virtual currency as property for federal taxation and that "an individual who 'mines' virtual currency as a trade or business [is] subject to self-employment tax".

In November 2013, the United States Senate held a committee hearing titled "Beyond Silk Road: Potential Risks, Threats and Promises of Virtual Currencies" to discuss virtual currencies. At this hearing, held by senator Tom Carper, bitcoin and other currencies were received generally positively, in that bitcoin was a "legal means of exchange" and that "online payment systems, both centralized and decentralized, offer legitimate financial services" per US officials Peter Kadzik and Mythili Raman.

The Federal Election Commission (FEC) deadlocked in November 2013 on whether to allow bitcoin in political campaigns with three Democrat members voting nay, three Republicans voting yea. Political bitcoin pioneers New Hampshire House member Mark Warden and Southern California politician Michael B. Glenn independently from each other accepted bitcoin in their campaigns, and paved the way for others to follow suit. In May 2014, the FEC issued draft guidance to U.S. politicians who want to receive bitcoin donations. It declined to declare bitcoins currency, stating they fit into its "anything of value" definition.

In May 2014, Brett Stapper, co-founder of Falcon Global Capital, registered to lobby members of Congress and federal agencies on issues related to bitcoin.

In January 2014, the U.S. Securities and Exchange Commission (SEC) focused on whether bitcoin-denominated stock exchanges were illegal, and inquired into unregistered securities offerings of the gambling site SatoshiDice and FeedZeBirds. In May it warned investors that "both fraudsters and promoters of high-risk investment schemes may target bitcoin users". The SEC charged and settled with the former owner of SatoshiDice and FeedZeBirds in June 2014 for selling unregistered securities. In October 2014, former SEC Chair Arthur Levitt joined BitPay, a bitcoin payment processor, and Vaurum, a bitcoin exchange for institutional investors in advisory roles.

The U.S. Commodity Futures Trading Commission (CFTC) stated in March 2014 it considered regulation of digital currencies after TeraExchange announced to launch a swap. TeraExchange constructed an index for the value of bitcoin from six different exchanges. The dollar value of a given bitcoin amount is locked in the swap. The CFTC approved the financial product in September 2014, satisfied it "could not easily be manipulated". There may be significant legal issues around security interests in bitcoin under the Uniform Commercial Code.

In June 2014 California Assemblyman Roger Dickinson (D–Sacramento) submitted draft legislation (Assembly Bill 129) to legalize bitcoin and other forms of alternative and digital currency. After the GAO had called for increased oversight of bitcoin, the Consumer Financial Protection Bureau warned consumers of bitcoin being risky.

As of May 2015, New York state is the only state with a final bitcoin rule, commonly referred to as a BitLicense. In March 2014, the New York State Department of Financial Services led by superintendent Benjamin Lawsky had officially invited bitcoin exchanges to apply with them, and in July 2014 it published draft regulations for virtual currency businesses. Businesses would have to provide transaction receipts, disclosures about risks, policies to handle customer complaints, maintain a cybersecurity program, hire a compliance officer and verify details about their customers to follow anti-money-laundering rules, per FinCEN.

In October 2015, a systems engineer and aspiring bitcoin entrepreneur, Theo Chino filed a New York Supreme Court lawsuit challenging the authority of the New York State Department of Financial Services to regulate bitcoin, claiming that even if the department had the authority to regulate, it utilized it in an "arbitrary and capricious" way.