Whether you want to create a small crypto fortune for yourself, start a crypto business, or simply mine crypto for profit, it’s a good idea to first get familiar with how certain countries address the cryptocurrency movement.
Australia is a friendly country that views Bitcoin as a commodity. It’s considered an asset by the Australian Taxation Office and not money or foreign currency. As such, income generated from trading Bitcoin is considered business income.
Not all banks in Canada allow the use of debit and credit cards for buying Bitcoin. That said, Bitcoin transactions are classified as barter transactions. As such, any income generated is seen as business income.
Various taxes apply whether the individual is investing or operating an exchange for the cryptocurrency. The country has a generally positive stance in regards to Bitcoin but it also forces exchanges to adhere to anti-money laundering laws.
Similar to Canada and Australia, the USA employs strict anti-money laundering laws when it comes to Bitcoin. However, the country is even friendlier to the crypto sphere as there are many large businesses that can accept payment in crypto.
It’s also worth noting that Bitcoin is found on the US derivatives market, which helps legitimise the crypto asset even more. The US Treasury classifies Bitcoin as money service business or MSB and not currency. The crypto asset is also taxable.
Another country that’s Bitcoin-friendly is Finland. There the cryptocurrency gets the commodity treatment. Furthermore, Finland gave Bitcoin an important classification as a financial service. Hence, it has a VAT exempt status.
Finland, and other Nordic countries are considered havens for miners because of the reduced operating costs of large crypto farms. The electricity cost is considerably lower than in other countries and the cold temperatures help solve the heating problems associated with massive rigs of ASIC miners.
Other European Countries
Belgium also gave Bitcoin a VAT exempt status. The UK is Bitcoin-friendly too, although it imposes strict tax regulations. Germany also has a pro-crypto stance and taxes the cryptocurrency differently depending on the entity – exchange, individual users, miners, etc.
Cyprus is even more convenient for crypto investors and miners since the country imposes no regulations over the cryptocurrency, yet it is legal to use.
Portugal has no legal framework in place to handle Bitcoin and cryptocurrencies. It’s one of the friendliest countries on this list for investors and miners.
India started out against Bitcoin by banning the cryptocurrency as a legitimate payment method, investment asset, and so on. However, since 2020, India revoked the ban after a Supreme Court of India decision.
Cryptocurrency trade is now legal in India and so is using crypto as a payment processor.
Another country that has been pro-Bitcoin for many years is Japan. The view is that cryptocurrencies are not currencies or bonds. However, they are taxable under law. Companies such as exchange platforms fall under strict anti-money laundering laws, even though the crypto asset isn’t considered legal tender but property value.
Russia is one of the most unfriendly places in the world for the crypto movement. Although Bitcoin isn’t regulated in Russia, using it as payment for services and goods is deemed illegal. That said, Russian miners still account for a large portion of the world’s Bitcoin production. You just can’t use it on Russian territory.
Surprisingly, the country which is perhaps responsible for the largest production of Bitcoin is also one of the countries that cracks down hard on cryptocurrencies. Bitcoin is illegal in China, whether it’s used for investments or as payment.
All cryptocurrency exchanges are banned in China and so are all banks from transacting in Bitcoin. Recently, the Chinese government went after miners too, in an effort to cut all ties with the cryptocurrency.
Yet China is not against cryptocurrencies as the government has been meaning to release its own government-approved crypto coin. It makes sense that it takes a harsh stance against Bitcoin as it’s a valuable crypto coin that could rival the country’s own attempt at crypto.
Many countries in South America have a negative stance regarding Bitcoin. Countries like Bolivia, Ecuador, and Columbia don’t approve of investing in Bitcoin, mining it, or using it for payments.
Other Countries with Unfriendly Stances
There are also countries that accept some aspects of cryptocurrencies but not all of them. For example, Cambodia has a banking ban on Bitcoin and other crypto coins. Yet it’s not illegal to own or mine.
The same can be said for Indonesia where you can hold and trade crypto but you can’t buy goods or services with it.
Cryptocurrencies are adopted in more and more countries each year. With some even going back on previous bans and opening up to crypto investors, miners, and the use of crypto as payment.
While many countries have their own views and taxation laws, it’s clear that Bitcoin and the crypto movement have come a long way.