Bitcoin: Digital Currency or Money for Criminals?

Bitcoin: Digital Currency or Money for Criminals?

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Blockchain

As the past year was coming to an end, Bitcoin’s popularity grew like that of a hollywood star. It’s meteoric rise has shown the world the power of other cryptocurrencies such as Ethereum, Ripple and even Dogecoin.

The drawback of the Bitcoin rise is that, government bodies are now more alert in its regard. Many, such as China have outlandishly banned any trading, dealing or mining of cryptocurrencies. Some have a loose interpretation as far as considering it as a means of trade or exchange but in reality it is just an investment.

The Government’s Point Of View:

The only reason we are secure in using fiat currency (government sanctioned bills and coins) is because they offer us security in its value. ( Before the first world war, we used the gold standard. The amount issued in fiat currency bills was matched in purchase of Gold Reserve in the countries bonds)

The one feature which acts like a drawback of cryptocurrency, is that it does not warrant stability in terms of its value. It is more similar to stocks and bonds, whose value keeps fluctuating!

Another factor that plays against the cryptocurrencies is the fact that they are anonymous. Hence, hypothetically speaking, they become a very good portal to convert black money into white or in to cryptos. As the most famous saying goes, “Death and Taxes are inevitable.”

So, if the government doesn’t know who is involved in the mining, trading or cryptos, how will they tax said individuals?

Must Read: Bitcoin Descents: Nothing Else Matters

We have compiled a list of the countries and their government’s point of view in regards to cryptocurrencies.

United States of America Big flurry of activity in regards to cryptocurrencies. Many different sectors are adding their 2 cents. The one prominent factor that comes into play is that they worry on the ‘Privacy Policy’ that is in place on a Blockchain may work in the aid of illegal aliens from using it to hoard arms and other irregular items. They also are ‘concerned’ about the particular number of cryptocurrencies that are in a particular person’s wallet. They need this information as such assets are taxable under law.
India India has just recently outright banned any trading, mining or dealing of cryptocurrencies. Till December ‘17, they used to issue warnings to the general public against cyber security breaches.
United Kingdom While the overall reaction may be positive of the Government of UK, there is still a long way for them to go before they start allowing trading in cryptos. The Bank of England considers this a revolutionary idea of ensuring financial independence to all. Let’s hope they do not take back their words, just to make the Sterling more stronger.
Canada With many firsts to its name, Canada makes its stand in regards to cryptocurrencies very clear. They consider it an asset. And allow its use. The only fly in the ointment is that they consider its trading as a barter system. While this may not be an issue to many, in the long run, this may cause problems in terms of legalizing it.
Commonwealth of Australia A lot of ignorance was first displayed by the government in regards to its use as a legalized currency. But, as of 13 December, it is now removed from double taxation policies and legalized enough to be used as a currency.
Republic of the Philippines As a country with the highest amount of Remittance, Bitcoin and other cryptocurrencies are now officially used as a legitimate payment method. The government also issued a proper regulatory framework for Bitcoin users, exchanges and companies.
Germany With economy booming, it has become transparent that the workers rather get their earnings in cash than in cryptos. The demographic of the people who are dealing in anything related to Bitcoins and Cryptos are the business and the the upper economic classes. This divide has prompted the government to keep a close eye on its dealings but shows no signs of banning it outright.
The Netherlands Bitcoin holds the status of an item of barter. This means, it is not needed to hold specific licensing or compliance requirements. Bitcoin is not considered a financial product as defined by its law and hence the  purchase or sale of Bitcoin are free from the financial services act.
Republic of South Africa Cryptocurrency transactions are subject to general tax rules. The government also expects its citizens to have full disclosure in regards to the amount involved in the trading so that tax can be added.
Italy Italian Tax authorities treat Bitcoin as a form of currency. They have clarified time and again that purchases and sales made with Bitcoin are to remain exempt from VAT. But, Italian tax officials appear to be applying income tax to trades involving Bitcoin. So a yo-yo like situation. Expect more developments soon.

There you have it folks. Hope this above mentioned list helps clear your countries status in regards to cryptocurrencies. A new market, everyday gives rise to newer rules and policies. Keep your eyes open and your wallets secure.

Next Read: Top 10 Cryptocurrencies That Performed In 2017

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