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Bitcoin & Other Cryptocurrencies are legal or illegal – In India And World 2018

List of Countries Who Banned And Accepted Bitcoin and Other Cryptocurrencies – India & World 2018

Bitcoins are not issued, endorsed, or regulated by any central bank. Instead, they are created through a computer-generated process known as mining. Therefore the question about its legality always arises. The currency is being traded on exchanges, and companies have even made investments in virtual currency-related ventures.

These activities portray a technically well-established virtual currency system, but there is still no uniform international legal law covering the use of bitcoin. It depends on the location and activity of the user.

Time to time the Reserve Bank of India (RBI) has cautioned the Indian citizens about the potential risks involved in Bitcoin and other cryptocurrencies as these Virtual Currencies are neither a currency nor a physical asset and not authorized by any central bank or monetary authority. As such, any user, holder, investor, trader, etc. dealing with Virtual Currencies will be doing so at their own risk. On March 15, 2017, the finance ministry had constituted an inter-disciplinary committee chaired by Special Secretary in Department of Economic Affairs to take stock of the present status of Virtual Currencies both in India and globally and suggest measures for dealing with such currencies.

The committee comprises nine members including representatives of RBI, SBI, NITI Aayog and Department of Financial Services. Indian Government had also sought public views on its official platform ‘MyGov’ and asked: “Whether Virtual Currencies (VCs) should be banned, regulated or observed?”. On June 27, Mr Arun Jaitley held a meeting to examine risks related to virtual currencies (VCs) with Mr Ravi Shankar Prasad (Minister of Electronics & Information Technology), Mr Arvind Panagariya (Vice Chairman of NITI Aayog), and other senior officials. Cryptocurrencies have joined Indian Parliament discussions too, as the Minister of Finance, Mr Arun Jaitley reiterated the India Government’s stance on the question of Mr Rajeev Chandrasekhar that “Is Indian government is considering to block all Bank accounts and Credit cards that are being used for Bitcoin or Cryptocurrencies transactions”. He informed the Rajya Sabha that the government is waiting for the newly appointed expert panel’s advice, as the trading currently involves a huge number of users and can be shut down as part of some immediate reactionary measures.

The confusion has grown after the RBI and Indian government stated that Bitcoin is neither a currency as it is neither a legal tender nor an asset due to the lack of any physical attribute. According to the Income Tax officials, the income of Bitcoin exchanges has not been translated into the tax. If cryptocurrencies are regarded as currencies, there will not be any transactional charges like any other digital transactions. If this is taken into the services category, Bitcoin will supposedly fall under 12% or 18% GST slab.

List of countries who have accepted Bitcoin and other cryptocurrencies:

There are several countries that have shown interest in Bitcoin and other cryptocurrencies:

United States of America (USA): USA has taken the positive approach towards Bitcoin, even though there are several government agencies who are opposing the cryptocurrencies for illegal transactions, as it may use for the criminal activities like buying and selling illegal goods like drugs or weapons. The US Department of Treasury’s Financial Crimes Enforcement Network (FinCEN) has defined Bitcoin not as currency, but as a Money Services Business (MSB).  Bitcoin is also categorized as property for taxation purposes by the Internal Revenue Service (IRS).

Canada: Canada has also taken a friendly stance over bitcoin and also ensuring the cryptocurrency is not used for money laundering. Bitcoin exchanges need to register with Financial Transactions and Reports Analysis Centre (FINTRAC).

Australia: Australia allows entities to trade, mine or buy bitcoin. The Australian Taxation Office (ATO) considers bitcoin transactions barter arrangement subject to appropriate taxes depending upon the use and user.

European Union:

In Finland, the Central Board of Taxes (CBT) has given bitcoin a value-added tax-exempt status by classifying it as a financial service. Bitcoin is treated as a commodity, not as a currency.

In Belgium, Federal Public Service Finance has also made bitcoin exempt from Value Added Tax (VAT).

In Cyprus, bitcoins are not controlled or regulated but are not illegal either.

In United Kingdom (UK), Financial Conduct Authority (FCA) has a pro-bitcoin stance and wants the regulatory environment to be supportive of the digital currency. Bitcoin is under certain tax regulations in the UK.

In Bulgaria, National Revenue Agency (NRA) has also brought bitcoin under its existing laws.

Germany is open to bitcoin; it is considered legal but taxed differently depending upon whether the authorities are dealing with exchanges, miners, enterprises or users.

List of Countries Who Have Banned Bitcoin And Other Cryptocurrency:

Iceland: Foreign exchange trading with bitcoin is banned in Iceland as the cryptocurrency is not compatible with the country’s Foreign Exchange Act.

Bolivia: El Banco Central de Bolivia issued a resolution banning bitcoin and other cryptocurrencies in 2014.

Kyrgyzstan: National Bank of the Kyrgyz Republic made a clear statement that using bitcoin and altcoin as a payment form in the Kyrgyz Republic will be prohibited by the law of the state in the year July 2014.

Vietnam: The government of Vietnam and its state bank have maintained that bitcoin is a not a legitimate payment method and made it illegal for both financial institutions and citizens to deal in bitcoin.

Ecuador: The government of Ecuador banned bitcoin and other cryptocurrencies by a majority vote in the national assembly. However, the nation has plans to create its own cryptocurrency in the future.

Russia: Russia’s Ministry of Finance is hoping to pass a law to ban bitcoin very soon in this year.

China: All banks and other financial institutions like payment processors are prohibited from transacting or dealing in bitcoin. However, people are free to deal in bitcoin among them. It continues to be one of the world’s largest bitcoin markets.

Nepal: Trading in Bitcoin and other cryptocurrencies is banned in Nepal. As recently reported, the Nepalese government has jailed almost a dozen cryptocurrency enthusiasts.

Bangladesh: In September 2014, Bangladesh Bank stated that “anybody caught utilizing the virtual currency might be jailed underneath the country’s strict anti-money laundering laws “.

Disclaimer:  Please note that, this article is only for the information purpose only and not a trading and investment advice. Do your own research and take expert’s advice before trading and investing. Find out if trading is legal in your jurisdiction. Trading in cryptocurrency carries a high level of risk, and may not be suitable for all investors. Therefore trade and invest at your own risk. We will not be responsible for the any risk involved in it.