President Nayib Bukele of El Salvador declared that the recently passed law making bitcoin legal tender will take effect on September 7. Bukele's plan to embrace bitcoin as legal tender was passed by MPs, making it the first country in the world to do so.Countries including Finland, Belgium and the UK consider cryptocurrencies as assets and not currency.
Bitcoin may also be legalised in Paraguay. A pro-bitcoin lawmaker in Paraguay has announced that he will introduce bitcoin legislation in Congress next month, with the goal of making the country a global hub for cryptocurrency investors.
According to a report by cryptocurrency news website Bitcoin.com, his attempts come after El Salvador passed a statute making bitcoin legal tender.
Cryptocurrencies are legal in the following countries
European Union (EU)
While different European countries have varied legislation, the European Court of Justice (ECJ) recognised cryptocurrency trading as a service in 2015, exempting it from VAT in all EU member states.
Cryptocurrencies are treated as assets rather than currency in Finland, Belgium, and the United Kingdom. Individuals and corporations who possess or trade cryptocurrencies must comply with all of the regulations, which include disclosure and compliance requirements.
United States of America (USA)
According to the Securities and Exchange Commission (SEC), none of the cryptocurrency exchanges have registered with the SEC, posing a significant risk to investors as compared to traditional securities markets, and correspondingly greater opportunities for fraud and manipulation. It has seen a push from prominent businesses such as Dish Network,DISH), Microsoft, Subway, and Overstock (OSTK) by adding bitcoin as a payment method.
The Financial Crimes Enforcement Network (FinCEN) of the US Department of Treasury recognises it as a money services company (MSB) rather than a currency, requiring exchanges and payment processors to disclose and register under the Bank Secrecy Act. In the United States, cryptocurrency is classified as ordinary property for tax purposes.
Canada
Canada, like the United States, has a similar approach to cryptocurrencies. For the purposes of the Revenue Tax Act, the taxation authorities recognises bitcoin as a commodity, which means that any income from cryptocurrency transactions is normally handled as business income or as a capital gain, depending on the circumstances.
It also compels cryptocurrency owners to retain records, including firms that accept the currency as payment. The Canada Revenue Agency(CRA) has produced a guideline.
India
The Indian government has yet to issue any cryptocurrency-related guidelines or regulations, the Supreme Court of India overturned the Reserve Bank of India's circular prohibiting banks from facilitating cryptocurrency-related transactions in 2020, giving cryptocurrency traders reason to rejoice.
The central bank, on the other hand, has instructed banks to conduct necessary customer due diligence in accordance with regulations governing standards for Know Your Customer (KYC), Anti-Money Laundering (AML), Combating Terrorist Financing (CFT), and regulated entities' obligations under the Prevention of Money Laundering Act (PMLA), 2002.
Australia
Australia has also declared cryptocurrencies legal however, it comes under the purview of Anti-Money Laundering and Counter-Terrorism Financing Act. Like western counterparts, Australia also considers virtual currencies as property and they are taxed as capital gains.
