List of Countries Where Cryptocurrencies are Legal or Prohibited

In the period of rapid growth in the popularity of cryptocurrencies, the question of their legal status is becoming more relevant. Bitcoin and other digital assets beckon investors and users, opening up new horizons not only for investment but also for making payments.

The lack of a unified legal framework and disparate legislative approaches in different countries create an atmosphere of uncertainty. There is no unified solution at the global level. Let us understand the main aspects concerning the legality of cryptocurrency trading in different countries in order to clarify the picture of what is happening in the world.

Countries where Bitcoin is Legal

According to the Coin Dance portal, Bitcoin is completely legal in at least 111 countries. In most countries, cryptocurrency is not regulated in any way — the authorities do not prohibit storing digital money and trading it. Now the list of countries where cryptocurrency (in particular, Bitcoin) is legal includes:

CanadaStatus In Canada, cryptocurrency is not a means of payment: from the point of view of paying taxes, bitcoins are a commodity. Nevertheless, transactions with them are legal. At the same time, crypto exchanges are considered financial organizations and are regulated by relevant laws. In particular, such companies are required to file reports and report suspicious transactions.
the USAStatus In America, cryptocurrency is legal and recognized as a freely convertible currency. Companies that provide bitcoin exchange or crypto-transaction processing services are also in the legal field: such services fall under the MSB (financial services business) category, undergo the necessary registration with the Ministry of Finance and are subject to the requirements of the Bank Secrecy Act.
the UKStatus There is a noticeable trend in the UK to turn the country into a global cryptocurrency center. Thus, in June 2023, a draft law aimed at regulating the cryptocurrency market was approved: according to it, stablecoins receive the status of a means of payment, and blockchain can be integrated into the country's financial markets.
JapanStatus Сryptocurrency in Japan is a property or commodity, but it is not an officially recognized means of payment. This approach means that banks and certain types of organizations are prohibited from conducting cryptocurrency transactions. Nevertheless, individuals and most legal entities have the right to receive cryptocurrency in exchange for goods and services, and cryptocurrency exchanges are regulated by law.
AustraliaStatus In Australia, Bitcoin is treated as property and cryptocurrency transactions as a form of income subject to capital gains tax. At the same time, holding cryptocurrencies is not taxable in most cases. In order to calculate taxes, citizens are required to keep records and store information about all cryptocurrency transactions.
SpainStatus In Spain, cryptocurrencies do not have the status of legal tender, but their use and trading are permitted. The National Securities Market Commission (Comisión Nacional del Mercado de Valores, CNMV) and the Bank of Spain (Banco de España) are the main regulatory bodies that oversee cryptocurrency-related activities. Cryptocurrency transactions are subject to capital gains tax, and companies involved in cryptocurrency trading are required to pay corporate tax.
MexicoStatus In Mexico, cryptocurrencies such as Bitcoin are not recognized as legal tender, but their use and trading are permitted. They are considered virtual assets and are regulated under the Fintech Law, passed in 2018. This law provides a legal framework for regulating activities related to cryptocurrencies and financial technologies.
VenezuelaStatus The use of cryptocurrency in Venezuela has become quite common in recent years, due to the hyperinflation of the national currency, the bolivar. In 2018, the Venezuelan government launched its own cryptocurrency, the Petro, backed by oil and other natural resources. Petro has not gained widespread adoption and is not considered a successful project. Despite Petro, Venezuelans widely use other cryptocurrencies, such as Bitcoin, Ethereum, and Litecoin. The Venezuelan government does not ban the use of cryptocurrency, but it has not fully legalized it either.
ArgentinaStatus Argentina is one of the countries where cryptocurrencies are very popular. In the context of high inflation and economic instability, many Argentines are turning to cryptocurrencies as a means of preserving savings and protecting against the devaluation of the national currency. In 2019, the BCRA emphasized that cryptocurrencies are not considered legal tender, but their use is not prohibited. In 2017, Argentina passed a law on cryptocurrency taxation, which requires citizens to declare their income from cryptocurrency transactions.
GermanyStatus In Germany, cryptocurrencies are considered private money and their use and trading are permitted. The Federal Financial Supervisory Authority (BaFin) classifies cryptocurrencies as "units of account" and does not consider them legal tender, but recognizes their legal status for investment and trading purposes. For individuals, cryptocurrency transactions carried out during the year are taxable if the profit exceeds 600 euros.
AustriaStatus In Austria, cryptocurrencies such as Bitcoin are not legal tender, but their use and trading are completely legal. The Austrian Financial Authority (FMA) is the main regulator overseeing cryptocurrency-related activities. The FMA provides guidelines and instructions on issues related to cryptocurrencies and ICOs.
Côte D'IvoireStatus In Côte D'Ivoire, cryptocurrencies do not have official status as legal tender. At the same time, there is no specific legislation prohibiting the use of cryptocurrencies. This creates a certain uncertainty for users and entrepreneurs who want to use cryptocurrencies in their transactions. Financial regulators in Côte d'Ivoire have not issued specific directives regarding cryptocurrencies. Currently, cryptocurrency transactions are not subject to special taxes in Côte d'Ivoire.
TurkeyStatus In 2021, the Central Bank of Turkey (CBRT) issued a statement announcing that cryptocurrencies would not be considered legal tender. However, the CBRT did not prohibit the use of cryptocurrency for trading or investment. This left the legal status of cryptocurrency in a gray area and created uncertainty for users and businesses. However, in 2023, the Turkish government took a significant step forward by announcing plans to legalize and regulate cryptocurrency. In April 2023, a draft law was introduced that defines crypto assets as “digital assets that are not means of payment but can be traded on electronic platforms.”
RussiaStatus In Russia, cryptocurrencies such as Bitcoin and Ethereum are not recognized as legal tender. However, their use and trading are not prohibited. In January 2021, the Law on Digital Financial Assets (DFA) came into force, legalizing transactions with cryptocurrencies, but at the same time limiting their use as a means of payment. Income from cryptocurrency transactions is subject to taxation. In 2021, amendments were made to the Tax Code of the Russian Federation, requiring citizens and organizations to declare their cryptocurrency assets and pay capital gains taxes.
UkraineStatus In Ukraine, cryptocurrencies such as Bitcoin are not recognized as legal tender, but their use and trading are not prohibited. Cryptocurrencies are considered property and can be used for investments and other transactions. In September 2021, the Verkhovna Rada of Ukraine adopted the Law on Virtual Assets, which regulates the use of cryptocurrencies and ensures their legal status.
UzbekistanStatus In Uzbekistan, cryptocurrencies have received official legal status. In July 2018, the President of Uzbekistan Shavkat Mirziyoyev signed several decrees and resolutions that legalized cryptocurrency transactions and mining. In accordance with the presidential decree "On measures to develop the digital economy in the Republic of Uzbekistan", rules were established to regulate cryptocurrencies and cryptocurrency exchanges.
KazakhstanStatus In 2020, Kazakhstan became one of the first CIS countries to legalize cryptocurrency mining and circulation. The Law "On Digital Assets" defined the legal status of cryptocurrency, established a framework for its regulation, and outlined a number of permitted operations.
Hong KongStatus Hong Kong authorities treat cryptocurrencies as digital goods or assets, rather than as legal tender. This means that companies and individuals can use cryptocurrencies to buy and sell, but they are not recognized as a legal means of exchange in Hong Kong. Hong Kong authorities are developing strategies and regulations for cryptocurrencies and blockchain technologies. For example, in early 2020, Hong Kong adopted a new regulatory framework for cryptocurrency platforms, requiring them to obtain a license from the Hong Kong Securities and Futures Commission (SFC).
KoreaStatus Despite its popularity, the use of cryptocurrency in South Korea is subject to a number of restrictions. In 2020, a restriction was introduced prohibiting the use of credit cards to purchase cryptocurrency. This was done in order to contain financial risks and protect consumers. Advertising of cryptocurrency services in South Korea is strictly regulated and subject to a number of restrictions. Profits from cryptocurrency transactions are taxed in South Korea.
BrazilStatus In Brazil, cryptocurrencies are officially recognized as legal entities by law. The country does not prohibit the use of cryptocurrencies as a means of exchange or investment. In 2019, Brazil enacted a law requiring all cryptocurrency exchanges to register with the Brazilian Securities Commission (CVM). This legislation is aimed at combating money laundering and terrorist financing.
PolandStatus In Poland, cryptocurrencies are not banned and their use is generally permitted, although the country has certain regulations and tax obligations regarding cryptocurrency transactions. In 2020, Poland passed new laws that require cryptocurrency exchanges and platforms to register and comply with strict anti-money laundering regulations. Cryptocurrency exchanges must cooperate with national supervisory authorities and follow measures to combat financial fraud.
IndiaStatus In India, the cryptocurrency landscape has long been controversial due to the lack of clear legal regulation. In 2020, the Supreme Court of India overturned the RBI's ban on providing banking services to cryptocurrency companies. This decision paved the way for cryptocurrency exchanges and cryptocurrency services to resume operations in India. India is currently debating the Cryptocurrency and Official Digital Currency Regulation Bill, which proposes to establish rules for the use and trading of cryptocurrencies in the country.
PortugalStatus Cryptocurrencies are not recognized as official means of payment, but their use as investments and means of exchange is not prohibited. In 2023, the Portuguese government introduced a tax on profits from cryptocurrency, but the rate remains one of the lowest in Europe - 28%. This makes Portugal an attractive destination for those who want to invest in cryptocurrency or use it for payments and transfers.
IranStatus The Central Bank of Iran (CBI) has expressed a cautious approach to cryptocurrencies, but does not ban their use. However, the CBI warns of the risks associated with investing in cryptocurrencies and regulates cryptocurrency exchanges and platforms. In Iran, cryptocurrency mining is considered legal, provided that miners register their operations and use electricity legally. However, in recent years, there have been cases where authorities have shut down mining farms due to high electricity consumption.

The listed countries provide different levels of legalization and regulation of Bitcoin and other cryptocurrencies, creating favorable conditions for their use and development.

Countries that use Bitcoin as Legal Tender

The amount of countries that have allowed the use of Bitcoin as legal tender is small — only two (El Salvador and the CAR). The authorities of these countries have recognized Bitcoin as a legal means of payment with free circulation.

True, all other cryptocurrencies have not yet been recognized in the same status and in this sense have not been legalized. But there is an important fact: in these countries, you can actually go to a store and pay with bitcoins. What countries are these, we tell below:

El SalvadorStatus El Salvador became the first country in the world to recognize bitcoin as legal tender just like the US dollar. The decision that had been initiated by the President Nayib Bukele in September 2021, was a historic moment. It marked a step towards a more inclusive financial system. The law requires all businesses to accept the cryptocurrency as a system of payment if they're technically able to do so. El Salvador has launched its own digital portmanteau app called Chivo. It allows druggies to store and change Bitcoin without freights. The government has also installed Bitcoin ATMs across the country so that the citizens can change cryptocurrency for cash. The relinquishment of Bitcoin is aimed at stimulating profitable growth, attracting investment, and reducing freights on transfers from abroad, which make up a significant portion of the country’s GDP.
the CARStatus In April 2022, the CAR congress passed a bill that recognizes Bitcoin as the country’s sanctioned currency. This made the CAR the alternate country in the world to legitimize Bitcoin alongside its national currency — the CFA franc. The government has declared the creation of a public digital currency called Sango Coin. These enterprises are aimed at creating a fiscal structure to support the use of cryptocurrencies in the country. In addition, the government is laboriously conducting educational programs for citizens to increase mindfulness and understanding of cryptocurrencies and blockchain technologies. This includes forums , and fiscal knowledge juggernauts. As one of the least advanced countries in the world with limited access to fiscal services and the internet, Bitcoin relinquishment faces numerous challenges. Still, the government hopes that the use of cryptocurrency will help overcome fiscal rejection and attract investment in structure and technology systems, which could contribute to the country’s profitable growth.

Thus, only in these two countries does Bitcoin have the status of an official means of payment. In other countries cryptocurrencies are legalized for different transactions, but do not have the status of legal tender.

Which countries

Countries That Have Banned Cryptocurrency

Despite the explosive growth in the popularity of cryptocurrencies around the world, nine countries have decisively banned their use and trading on their territory. Here is the list of some governments that consider the circulation of digital assets illegal:

ChinaStatus China's cryptocurrency policy is one of the strictest in the world. In September 2017, the country imposed a ban on initial coin offerings (ICOs). This was the catalyst for the closure of numerous cryptocurrency exchanges and projects within the country. In the following years, China has continued to tighten controls on cryptocurrencies.
AlgeriaStatus The use and trading of Bitcoin and other cryptocurrencies is strictly prohibited in Algeria. In 2017, the Algerian authorities issued a regulation that categorizes cryptocurrency transactions as an illegal activity.
MoroccoStatus Morocco became the first country in North Africa to prohibit the use of cryptocurrency in 2017. Bank Al-Maghrib expressed concern about the lack of regulation of cryptocurrencies, as well as their potential use for illegal purposes.
EgyptStatus In 2018, the Central Bank of Egypt banned banks and credit institutions from making any transactions with cryptocurrencies. The Chief Mufti of Egypt issued a fatwa declaring Bitcoin trading as forbidden by Islam.
NepalStatus In 2017, Nepal became the first country in South Asia to ban the use of cryptocurrencies. The Central Bank of Nepal expressed concern over the lack of regulation of cryptocurrencies as well as their potential use for illegal purposes. The ban means that banks and financial institutions in Nepal are prohibited from dealing with cryptocurrencies in any way. People are also discouraged from buying, selling or using cryptocurrency.
BoliviaStatus In 2014, the Central Bank of Bolivia issued a resolution that prohibits the use of any form of digital currency, including Bitcoin, Ethereum, and other cryptocurrencies. This ban applies to all types of cryptocurrency transactions, including the purchase, sale, and use of cryptocurrencies to pay for goods and services. The main reasons for the ban are concerns about the stability of the financial system, money laundering, and terrorist financing.
TunisiaStatus Cryptocurrencies do not have the status of legal tender in Tunisia, but their use is not outright prohibited. The Central Bank of Tunisia (Banque Centrale de Tunisie, BCT) has issued warnings about the risks associated with cryptocurrencies, such as volatility, money laundering and fraud.
OmanStatus The Central Bank of Oman (CBO) has issued a warning emphasizing that cryptocurrencies are not legal tender in the country. This means that using Bitcoin and other cryptocurrencies to pay for goods and services in Oman is not allowed.
BangladeshStatus Since 2014, Bangladesh has imposed a complete ban on the use and trading of cryptocurrencies. The Central Bank of Bangladesh has issued a notice warning that trading in Bitcoin and other cryptocurrencies is illegal and can lead to fines or imprisonment.

The motives behind the bans on the use of cryptocurrencies are various. The first reason is that governments are concerned about the potential impact of cryptocurrencies on monetary policy and the stability of the financial system. The decentralized nature of cryptocurrencies may limit the ability of central banks to control money flows.

Secondly, the anonymity of some cryptocurrency transactions may create conditions for money laundering, terrorist financing and other criminal activities. Lastly, governments do not want to lose control over the monetary system and mechanisms for regulating financial markets.

Cryptocurrency is a relatively new payment method, which at the moment has not yet been clearly defined in terms of legislation. Most countries in the world recognize the legality of cryptocurrency. According to the profile portal CoinGecko, by the end of 2023, more than 60% of states have legalized the use of digital money. Among the leaders is the European region.

However, not all countries have regulated the use of Bitcoin or other types of virtual money by legislation. Many states consider cryptocurrency as property and commodity rather than a means of payment. Nevertheless, there is a tendency to develop draft laws that will bring digital money into the legal field.

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