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Bitcoin Friendly Countries

Author: Mohammad Hafiz
by Mohammad Hafiz
Posted: Jul 21, 2017

The interest in cryptocurrencies is growing day by day as well as the number of Bitcoin-friendly countries. Bitcoin currency is the most famous and widespread cryptocurrency. Over the years of its existence, the price of Bitcoins behaved differently. Today, one virtual coin costs about $ 2,642.7, but its value increases hour on hour.

Bitcoin is not ordinary money. Surely, the cryptocurrency has common features with a fiat currency, they are both used as a means of payment, can be transferred or exchanged. But Bitcoin is decentralized and peer-to-peer. This means that no central banks, government, and other public authorities can control or issue it. Bitcoin currency can be traded anonymously.

Bitcoin payment system is entirely based on computer technology, the emission occurs only in digital form. Anyone can get the cryptocurrency, this process is called mining.

Interesting facts about Bitcoin currency

Bitcoin is the first cryptocurrency that was created by mysterious Satoshi Nakamoto. It is believed that this is a pseudonym of one or more creators of Bitcoin. Up to now, no one has been able to disclose the real name of the author. There were attempts to reveal the identity behind the persona, but none of them led to success.

Do you know that Bitcoin is divided into satoshi – the smallest unit of the bitcoin currency?

In November 2008, Nakamoto published an article "Bitcoin: A Peer-to-Peer Electronic Cash System", in which the Bitcoin system was described. Anyone who studies how Bitcoin works should read it. After the paper was published, Nakamoto launched the first version of the Bitcoin wallet and the Bitcoin network.

In 2010, Satoshi Nakamoto moved on to other things and has not been heard since then.

The first transaction with the use of Bitcoin took place in May 2010. Florida programmer Laszlo Hanyecz decided to prove the solvency of the cryptocurrency. He gave one of the Bitcoin Talk Forum participants 10 000 virtual coins in exchange for two pizzas. The rapid growth of the Bitcoin made this lunch the most expensive in history. If Hanyecz spent those 10 000 BTC today, pizza would be worth more than $20 million. The seven-year anniversary of Bitcoin Pizza Day was celebrated on May 22, 2017.

Gradually, online shops and services began to accept cryptocurrency as payment. Since then, the popularity of bitcoins has been growing. According to Coin ATM Radar, at the moment there are 1229 automated terminals (ATM`s). The largest countries in terms of installed bitcoin ATM`s are the United States, Canada and the United Kingdom.

In addition to Bitcoin, there are other cryptocurrencies such as Litecoin, Nxt, Ripple, Peercoin, Namecoin.

Status of Bitcoin in different countries

The legality of Bitcoins is controversial, its status varies from country to country. In Japan, Bitcoin is a legal payment method, in Germany, it is considered to be a unit of account, so it is a subject to tax. While in Thailand, Bitcoin is banned.

Let’s consider Bitcoin-friendly countries where it is accepted and safe to use.

The Bitcoin currency in the USA

Bitcoin is legal and regulated in the United States. Moreover, the US has the highest number of Bitcoin ATMs in the world.

Financial Crimes Enforcement Network (FinCEN), the US Department of the Treasury classified Bitcoin as a convertible decentralized virtual currency in 2013. That requires Bitcoin users to adhere to certain responsibilities like reporting, registration, and record keeping.

In September 2015, the Commodity Futures Trading Commission, CFTC, has officially recognized Bitcoins as a kind of commodity. A few months earlier, the Internal Revenue Service, IRS, has treated the Bitcoins as a property that could be taxed. In this case, Bitcoin currency is regarded as a valuable asset, like gold, which has a certain value.

After the publication of guidance, the New York Stock Exchange announced the NYSE Bitcoin Index (NYXBT). It became the first official market index of the cryptocurrency.

The US is one of the countries whose government is already working to prevent or reduce the use of cryptocurrency for illegal purposes.

The Bitcoin currency in Canada

Bitcoin is not a legal tender in Canada. However, that doesn’t mean that Canada doesn’t recognize Bitcoin.

An official from Canada’s finance department wrote in a statement to the Wall Street Journal: "Only Canadian banknotes and coins are recognized as a legal tender in Canada. The Bitcoin digital ‘currency’ is not a legal tender in Canada". After this statement, Canada continued to monitor developments involving virtual currency.

The first Bitcoin ATM was installed in Vancouver, Canada, by Robocoin in October 2013. It allows converting Bitcoins to Canadian dollars and vise-versa.

Canada Revenue Agency (CRA) classified the digital currency as a commodity, meaning that Bitcoin transactions are perceived as barter transactions.

A barter transaction is when you trade goods or services without using legal currency. For example, when you purchase something with Bitcoin, it’s considered to be a barter transaction.

The income generated is considered as the business income. "When Bitcoins are bought or sold like a commodity, any resulting gains or losses could be income or capital for the taxpayer depending on the specific facts," according to the CRA.

Bitcoin exchanges in Canada are also under the purview of anti-money laundering (AML) and counter-terrorist financing laws.

The Bitcoin currency in Japan

Japan is positive towards Bitcoin currency. It is legally recognized as a method of payment, however, virtual currency is not classified as a currency. The official monetary unit is only the Yen. Profits from Bitcoin trading can be considered as "income from business activities or miscellaneous income."

"The new law defines Bitcoin and other virtual currencies as a form of payment method, not a legally-recognized currency. Bitcoin will continue to be treated as an asset unless there are future revisions or directives to Japanese tax law."

Today, about 5 000 online stores have already accepted bitcoin as a payment method. The use of cryptocurrencies become attractive for various activities, beauty salons, fast foods, etc.

The Bitcoin currency in Australia

Australian authorities allow trading, mining or buying Bitcoin. According to the Australian Taxation Office (ATO), Bitcoin transactions are treated like a barter ones and incur GST costs. Users of the digital currency bear GST twice: when purchasing digital currency and exchanging for other goods.

"Transacting with bitcoins is akin to a barter arrangement, with similar tax consequences."

However, Australia confirmed that it will end Bitcoin double taxation this July. From July 1st, 2017, Bitcoin will be treated as money for GST purposes and purchases of the digital currency will no longer be a subject to the double taxation. Bitcoin users will not be taxed for purchasing and selling digital currency.

The Bitcoin currency in the European Union

On the territory of the European Union, Bitcoin is the means of payment in the same way as traditional money. Furthermore, Bitcoin exchange transactions are exempt from VAT (value-added tax) just like other transactions of banknotes and coins. This follows the ruling of the Court of Justice of the European Union.

Legal or illegal: Bitcoin status in Malaysia

Bitcoin is not recognized as legal tender in Malaysia. The Central Bank does not regulate the operations of Bitcoin. Herewith, Malaysia’s central bank, Bank Negara Malaysia (BNM), advised being cautious of the risks when using the digital currency.

So, each state has its own attitude to the cryptocurrency. Some people classify the cryptocurrency as a commodity and a legal tender and have already issued official documents that express the position towards Bitcoin. The others ones have no legal frameworks and the cryptocurrency is neither legal nor illegal. While some countries outright banned it.

About the Author

Hello! My name is Mohammad Hafiz. And recently I became a blogger

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Author: Mohammad Hafiz

Mohammad Hafiz

Member since: May 08, 2017
Published articles: 8

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