nterest in cryptocurrency has exploded in the past few years. The Pew Research Center estimates 9 in 10 Americans have heard about crypto. From Matt Damon’s infamous Super Bowl ad to President Joe Biden’s March executive order asking the government to look into the risks posed by digital currencies, crypto is a hotter topic now than ever before.
We have spent dozens of hours compiling the most relevant and useful information regarding cryptocurrency and its legal status across the globe. The viability, legality and even practicality of cryptocurrencies continue to be fiercely debated. As an increasing number of countries become more receptive to crypto, albeit to varying degrees, a deeper understanding of the legal status of crypto where you live will help you make the right decisions when considering if this asset is right for you. Before we take a look at the legal status of crypto across the world, let’s start with its beginnings.
A brief history of cryptocurrency
In order to better understand where we’re going, we need to know where we’ve been. The following timeline will give you some context and show you how cryptocurrency (or at least the concept of digital money) has been around longer than some of us have been alive.
- The concept of electronic money goes all the way back to 1983, when it was proposed by computer scientist David Chaum.
- In 1989 Chaum attempted to make his vision a reality by founding DigiCash, the first company to use cryptographic protocols, such as public and private keys, to complete transactions electronically. DigiCash was never able to grow its user base and in 1998 declared bankruptcy, being sold for assets in 2002.
- In use since 2009, bitcoin is the oldest decentralized cryptocurrency, setting the standard for crypto as we know it.
- In August 2014, the U.K. commissioned a study on cryptocurrency and what role it could play in its economy, focusing on regulation and consumer protection.
- In June 2021, El Salvador became the first country to adopt bitcoin as legal tender, though its de facto adoption by the people has been a challenge for the Salvadoran government.
- In September 2021, China declared all cryptocurrency illegal.
- In March 2022, Biden signed an executive order calling for measures to ensure the protection of consumers and investors, as well as to explore the possibility of a U.S. central bank digital currency.
Legal status by country
It’s easiest to name the countries where crypto is outright illegal. According to the U.S. Library of Congress, as of November 2021, a total of nine countries have banned cryptocurrency completely. These countries are Algeria, Bangladesh, China, Egypt, Iraq, Morocco, Nepal, Qatar and Tunisia. Another 42 countries have an implicit ban on the asset, generally by the means of not allowing financial institutions in the given country to take on crypto companies as clients.
In general, wherever crypto is legal, it is subject to:
- Anti-money laundering (AML) regulations: This allows the government to keep an eye on crypto trades to prevent illicit financial activity.
- Taxation: Cryptocurrency taxes vary from country to country. For example, in the U.S., the IRS taxes crypto as property, not income. However, several countries in the European Union tax it as income, with no value-added tax (VAT) being applied. A VAT is a tax on goods and services, hence the contrast with how it is treated in the U.S.
|Jurisdiction||Official Ban?||Implicit Ban?||Tax laws applied?||AML/CFT* laws applied?|
|Benin||No||Yes||No information||No information|
|Burkina Faso||No||Yes||No information||No information|
|Burundi||No||Yes||No information||No information|
|Cameroon||No||Yes||No information||No information|
|Central African Republic||No||Yes||No information||No information|
|Chad||No||Yes||No information||No information|
|Côte d’Ivoire||No||Yes||No information||No information|
|Democratic Republic of the Congo||No||Yes||No information||No information|
|Gabon||No||Yes||No information||No information|
|Maldives||No||Yes||No Information||No information|
|Mali||No||Yes||No information||No information|
|Nepal||Yes||No||No information||No information|
|Niger||No||Yes||No information||No information|
|Republic of the Congo||No||Yes||No information||No information|
|Senegal||No||Yes||No information||No information|
|Togo||No||Yes||No information||No information|
Other tax laws: yes
|United Arab Emirates||No||Yes||Yes||Yes|
Crypto as a daily-use currency
Everyday purchases with Bitcoin are becoming a more common sight than ever before. Many avenues facilitate this, including:
- Coinmap, a website that allows you to find locations near you that directly accept crypto as payment
- Crypto debit cards, which allow you to use your cyrpto to pay anywhere Visa or Mastercard is accepted, done by converting the crypto in your wallet into dollars upon purchase
- Sites such as Bitrefill and CoinGate, which allow you to buy gift cards with your crypto
These all make for convenient ways to use your crypto as cash, but if what you are looking for is a quick way to buy crypto with your cash, you’ll be happy to know that, according to Coin ATM Radar, there are upwards of 38,000 crypto ATMs worldwide.
All emerging technologies inevitably go through some growing pains. The adoption of any new system carries the same risk-reward relationship that goes for investments. With cryptocurrency, you get that relationship twice over, as it is both a relatively new technology and an investment. As it goes with new tech, education is the cornerstone of sound decision-making.
We hope the facts in this post helped you learn a bit more about cryptocurrency as a whole and set you on the path to determining whether crypto is right for you. If you enjoyed what you read here — and, I should hope so if you have made it this far — please consider sharing this with your friends and family.