Legality of bitcoin by country or territory
The legal status of bitcoin varies substantially from state to state and is still undefined or changing in many of them. Whereas the majority of countries do not make the usage of bitcoin itself illegal, its status as money varies, with differing regulatory implications.
While some states have explicitly allowed its use and trade, others have banned or restricted it. Likewise, various government agencies, departments, and courts have classified bitcoins differently. While this article provides the legal status of bitcoin, regulations and bans that apply to this cryptocurrency likely extend to similar systems as well.
Detail by union
| Country or territory | Legality |
| Legal ---- The European Union has passed no specific legislation relative to the status of bitcoin as a currency, but has stated that VAT/GST is not applicable to the conversion between traditional currency and bitcoin. VAT/GST and other taxes still apply to transactions made using bitcoins for goods and services. In October 2015, the Court of Justice of the European Union ruled that "The exchange of traditional currencies for units of the 'bitcoin' virtual currency is exempt from VAT" and that "Member States must exempt, inter alia, transactions relating to 'currency, bank notes and coins used as legal tender, making bitcoin a currency as opposed to being a commodity. According to judges, the tax should not be charged because bitcoins should be treated as a means of payment. According to the European Central Bank, traditional financial sector regulation is not applicable to bitcoin because it does not involve traditional financial actors. Others in the EU have stated, however, that existing rules can be extended to include bitcoin and bitcoin companies. The European Central Bank classifies bitcoin as a convertible decentralized virtual currency. In July 2014 the European Banking Authority advised European banks not to deal in virtual currencies such as bitcoin until a regulatory regime was in place. In 2016 the European Parliament's proposal to set up a taskforce to monitor virtual currencies to combat money laundering and terrorism, passed by 542 votes to 51, with 11 abstentions, has been sent to the European Commission for consideration. | |
| G7 | Legal ---- In 2013 the G7's Financial Action Task Force issued the following statement in guidelines which may be applicable to companies involved in transmitting bitcoin and other currencies, "Internet-based payment services that allow third party funding from anonymous sources may face an increased risk of ." They concluded that this may "pose challenges to countries in regulation and supervision". |
Detail by country or territory
Alphabetical index to classifications
Africa
Northern Africa
Western Africa
East & Central Africa
Southeast Africa
Horn of Africa
Indian Ocean States
Southern Africa
| Country or territory | Legality |
| Legal ---- While government officials have advised against the use of Bitcoin, there is no legislation against it and it remains fully legal. | |
| Legal ---- In December 2014 the Reserve Bank of South Africa issued a position paper on virtual currencies whereby it declared that virtual currency had ‘no legal status or regulatory framework’. The South African Revenue Service classified bitcoin as an intangible asset. | |
| Legal ---- In September 2017 the Bank of Namibia issued a position paper on virtual currencies entitled wherein it declared cryptocurrency exchanges are not allowed and cryptocurrency cannot be accepted as payment for goods and services. | |
| Legal ---- The Reserve Bank Of Zimbabwe is sceptical about bitcoin and has not officially permitted its use. On 5 April 2017 however, , a Pan-African Blockchain platform got licensed, through its banking partner, AgriBank, to operate in the country. |
Americas
North America
| Country or territory | Legality |
| Legal / Banking ban ---- Companies dealing in virtual currencies must register with the Financial Transactions and Reports Analysis Centre of Canada, implement compliance programs, keep the required records, report suspicious or terrorist-related transactions, and determine if any of their customers are "politically exposed persons." The law applies to non-Canadian virtual currency exchanges if they have Canadian customers. Banks may not open or maintain accounts or have a correspondent banking relationship with companies dealing in virtual currencies if that company is not registered with Fintrac. Dealers in digital currency are regulated as money services businesses. The Authorite des Marches Financiers, the regulator in the province of Quebec, has declared that some bitcoin related business models including exchanges and ATMs are regulated under its current MSB Act. As of April 2018, the Bank of Montreal announced that it would ban its credit and debit card customers from participating in cryptocurrency purchases with their cards. This is following another banking ban in Canada from Toronto Dominion | |
| Legal ---- The U.S. Treasury classified bitcoin as a convertible decentralized virtual currency in 2013. The Commodity Futures Trading Commission, CFTC, classified bitcoin as a commodity in September 2015. Per IRS, bitcoin is taxed as a property. Bitcoin was mentioned in a U.S. Supreme Court opinion regarding the changing definition of money on 21 June 2018. If money services businesses, including cryptocurrency exchanges, money transmitters, and anonymizing services do a substantial amount of business in the U.S., they are required to
In September 2016, a federal judge ruled that "Bitcoins are funds within the plain meaning of that term". | |
| Legal ---- Bitcoin is legal in Mexico as of 2017. It is to be regulated as a virtual asset by the FinTech Law. |
Central America
Caribbean
| Country or territory | Legality |
| Legal ---- The Bank of Jamaica, the national Central Bank, has publicly declared that it must create opportunities for the exploitation of technologies including cryptocurrencies. Accordingly, in 2017 the BoJ will be embarking on a campaign to build awareness of cryptocurrencies as part of increasing general financial literacy and understanding of cryptocurrencies. Indications are that early BoJ signals point to their general framework on "electronic retail payment service systems" possibly being brought to bear on initial cryptocurrencies considerations. | |
| Legal ---- Legal. |
South America
| Country or territory | Legality |
| Legal ---- Bitcoins may be considered money, but not legal currency. A bitcoin may be considered either a good or a thing under the Argentina's Civil Code, and transactions with bitcoins may be governed by the rules for the sale of goods under the Civil Code.. | |
| Illegal ---- Absolute ban. The Central Bank of Bolivia issued a resolution banning bitcoin and any other currency not regulated by a country or economic zone in 2014. | |
| Legal ---- Not regulated, according to a 2014 statement by the Central Bank of Brazil concerning cryptocurrencies, but is discouraged because of operational risks. In November 2017 this unregulated and discouraged status was reiterated by the Central Bank of Brazil. | |
| Legal ---- There is no regulation on the use of bitcoins. | |
| Legal / Banking ban ---- Financial institutions are not allowed to facilitate bitcoin transactions. The Superintendencia Financiera warned financial institutions in 2014 that they may not "protect, invest, broker, or manage virtual money operations". | |
| Illegal ---- The Ecuadorian government has issued a ban on bitcoin and other digital currencies. The National Assembly of Ecuador banned bitcoins including other decentralized digital/crypto currencies, due to the establishment of a new state-run electronic money system. Ecuador's new project would be controlled by the government and tied directly to the local currency—the dollar. Users will be able to pay for select services and send money between individuals. This was slated to begin in mid-February 2015. "Electronic money is designed to operate and support the monetary scheme of dollarization," economist Diego Martinez, a delegate of the President of the Republic to the Board of Regulation and Monetary and Financial Policy. | |
| Legal ---- Bitcoin miners used to be arrested by law enforcement authorities, however in January 2018 Carlos Vargas, the government's cryptocurrency superintendent said “It is an activity that is now perfectly legal. We have had meetings with the Supreme Court so that people who have been victims of seizures and arrests in previous years will have charges dismissed.” |
Asia
Central Asia
| Country or territory | Legality |
| Legal ---- Bitcoin is considered a commodity, not a security or currency under the laws of the Kyrgyz Republic and may be legally mined, bought, sold and traded on a local commodity exchange. The use of bitcoin as a currency in domestic settlements is restricted. | |
| Legal ---- On 2 September 2018, a decree legalizing crypto trading — also making it tax-free — and mining in the country came into force, making Uzbekistan a crypto-friendly state. |
Eurasia
West Asia
| Country or territory | Legality |
| Contradictory information ---- Absolute ban. According to the Library of Congress "Under article D.7.3 of the Regulatory Framework for Stored Values and an Electronic Payment System, issued by the Central Bank of the United Arab Emirates in January 2017, all transactions in “virtual currencies” are prohibited." Nevertheless, on 13 February 2018 Dubai gold trader Regal RA DMCC became the first company in the Middle East to get a license to trade cryptocurrencies, the Dubai Multi Commodities Centre said. DMCC's website emphasizes the "cold storage" of cryptocurrencies and states "DMCC’s Crypto-commodities license is for Proprietary Trading in Crypto-commodities only. No initial coin offerings are permitted and no establishment of an exchange is permitted under this license." | |
| Legal ---- As of 2017, the Israel Tax Authorities issued a statement saying that bitcoin and other cryptocurrencies would not fall under the legal definition of currency, and neither of that of a financial security, but of a taxable asset. Each time a bitcoin is sold, the seller would have to pay a capital gains tax of 25%. Miners, traders of bitcoins would be treated as businesses and would have to pay corporate income tax as well as charge a 17% VAT. | |
| Legal / Banking ban ---- Financial institutions are warned from using bitcoin. The Saudi Arabian Monetary Authority has warned from using bitcoin as it is high risk and its dealers will not be guaranteed any protection or rights. | |
| Legal / Banking ban ---- The government of Jordan has issued a warning discouraging the use of bitcoin and other similar systems. The Central Bank of Jordan prohibits banks, currency exchanges, financial companies, and payment service companies from dealing in bitcoins or other digital currencies. While it warned the public of risks of bitcoins, and that they are not legal tender, bitcoins are still accepted by small businesses and merchants. | |
| Legal ---- The government of Lebanon has issued a warning discouraging the use of bitcoin and other similar systems. | |
| Legal ---- Bitcoin is not regulated as it is not considered to be electronic money according to the law. | |
| Legal / Banking ban ---- Financial institutions are not allowed by central bank to facilitate bitcoin transactions. In April 2018, Central Bank of the Islamic Republic of Iran issued a statement banning the country's banks and financial institutions from dealing with cryptocurrencies, citing money laundering and terrorism financing risks. |
South Asia
| Country or territory | Legality |
| Legal / Banking ban ---- Financial institutions are not allowed to facilitate bitcoin transactions. In September 2014, Bangladesh Bank said that "anybody caught using the virtual currency could be jailed under the country's strict anti-money laundering laws". | |
| Legal ---- Finance minister Arun Jaitley, in his budget speech on 1 February 2018, stated that the government will do everything to discontinue the use of bitcoin and other virtual currencies in India for criminal uses. He reiterated that India does not recognise them as legal tender and will instead encourage blockchain technology in payment systems. "The government does not recognise cryptocurrency as legal tender or coin and will take all measures to eliminate the use of these cryptoassets in financing illegitimate activities or as part of the payments system," Jaitley said. In early 2018 India's central bank, the Reserve Bank of India announced a ban on the sale or purchase of cryptocurrency for entities regulated by RBI. In 2019, a petition has been filed by Internet and Mobile Association of India with the Supreme Court of India challenging the legality of cryptocurrencies and seeking a direction or order restraining their transaction. In March 2020, the Supreme Court of India passed the verdict, revoking the RBI ban on cryptocurrency trade. | |
| Illegal ---- Absolute ban. On 13 August 2017 Nepal Rastra Bank declared bitcoin as illegal. | |
| Illegal ---- , State Bank of Pakistan has announced that bitcoin and other virtual currencies/tokens/ coins are banned in Pakistan. For organizations and institutions it is banned by State Bank of Pakistan. Bank will not get involved if there is any dispute. They will not facilitate any transaction for it. The bank has issued an official notice on its website and has also posted the news on its official Twitter account. |
East Asia
Southeast Asia
| Country or territory | Legality |
| Legal / Banking ban ---- The National Bank of Cambodia, has "asked banks in Cambodia not to allow people to conduct transactions with cryptocurrencies." | |
| Legal to trade and hold / Illegal as payment tool ---- On 7 December 2017, Bank Indonesia, the country's central bank, issued a regulation banning the use of cryptocurrencies including bitcoin as payment tools starting 1 January 2018. | |
| Legal ---- On 4 November 2013, Bank Negara Malaysia met with local bitcoin proponents to learn more about the currency but did not comment at the time. BNM issued a statement on 6 January 2014 that bitcoin is not recognised as a legal tender in Malaysia. The central bank will not regulate bitcoin operations at the moment and users should aware of the risks associated with bitcoin usage. | |
| Legal ---- On 6 March 2014, Bangko Sentral ng Pilipinas issued a statement on risks associated with bitcoin trading and usage. Recently virtual currencies were legalized and cryptocurrency exchanges are now regulated by Central Bank of the Philippines under Circular 944; however bitcoin and other "virtual currencies" are not recognized by the BSP as currency as "it is neither issued or guaranteed by a central bank nor backed by any commodity." | |
| Legal ---- In December 2013, the Monetary Authority of Singapore reportedly stated that "hether or not businesses accept bitcoins in exchange for their goods and services is a commercial decision in which MAS does not intervene." On 22 September 2013, the Monetary Authority of Singapore warned users of the risks associated with using bitcoin stating "If bitcoin ceases to operate, there may not be an identifiable party responsible for refunding their monies or for them to seek recourse" and in December 2013 stated "Whether or not businesses accept Bitcoins in exchange for their goods and services is a commercial decision in which MAS does not intervene" In January 2014, the Inland Revenue Authority of Singapore issued a series of tax guidelines according to which bitcoin transactions may be treated as a barter exchange if it is used as a payment method for real goods and services. Businesses that deal with bitcoin currency exchanges will be taxed based on their bitcoin sales. In April 2019, the MAS referred to bitcoin as a digital payment token for purposes of the Payment Services Act. | |
| Legal ---- Thai based bitcoin exchanges can only exchange Digital Currencies for Thai Baht and are required to operate with a Thailand Business Development Department e-commerce license. They are also required to have KYC and CDD policies and procedures in place, in accordance with the Ministerial Regulation Prescribing Rules and Procedures for Customer Due Diligence, Reference Page 8 Volume 129 Part 44 A Government Gazette 23 May 2555. Suspicious activity must be reported to the Anti-Money Laundering Office , of Thailand. | |
| Legal to trade and hold / Illegal as payment tool ---- The State Bank of Vietnam has declared that the issuance, supply and use of bitcoin and other similar virtual currency is illegal as a mean of payment and subject to punishment ranging from 150 million to 200 million VND, but the government doesn't ban bitcoin trading as a virtual goods or assets. | |
| Legal to trade and hold ----Bitcoin and cryptocurrency is not legal tender in Brunei Darussalam and are not regulated by AMBD. It is not protected under the laws administered by AMBD. AMBD however, advised the public not to be easily enticed by any investment or financial activity advertisements, and to conduct due diligence and understand the financial products properly before participating. There is no law that stated that holding or trading bitcoin is illegal. |
Europe
Central Europe
Eastern Europe
Northern Europe
| Country or territory | Legality |
| Legal ---- Denmark's Financial Supervisory Authority issued a statement declaring that bitcoin is not a currency and stating that it will not regulate its use. On 17 December 2013, Denmark's Financial Supervisory Authority has issued a statement that echoes EBA's warning., FSA says that doing business with bitcoin does not fall under its regulatory authority and therefore FSA does not prevent anyone from opening such businesses. FSA's chief legal adviser says that Denmark might consider amending existing financial legislation to cover virtual currencies. | |
| Legal ---- In Estonia, the use of bitcoins is not regulated or otherwise controlled by the government. The Estonian Ministry of Finance have concluded that there is no legal obstacles to use bitcoin-like crypto currencies as payment method. Traders must therefore identify the buyer when establishing business relationship or if the buyer acquires more than 1,000 euros of the currency in a month. | |
| Legal ---- The Finnish Tax Administration has issued instructions for the taxation of virtual currencies, including the bitcoin. Rather than a currency or a security, a bitcoin transaction is considered a private contract equivalent to a contract for difference for tax purposes. Purchases of goods with bitcoin or conversion of bitcoin into legal currency "realizes" the value and any increase in price will be taxable; however, losses are not tax-deductible. Mined bitcoin is considered earned income. Ruling 034/2014 by the Finnish Central Board of Taxes stated that commission fees charged on bitcoin purchases by an exchange market were, under the EU VAT Directive, banking services and therefore VAT exempt. This is because the court classified bitcoins as payment instruments - whereas most countries treat their use as an unregulated method for the exchange of goods, or even as a crime. | |
| Legal ---- According to a 2014 opinion, from the Central Bank of Iceland "there is no authorization to purchase foreign currency from financial institutions in Iceland or to transfer foreign currency across borders on the basis of transactions with virtual currency. For this reason alone, transactions with virtual currency are subject to restrictions in Iceland." This does not stop businesses in Iceland from mining bitcoins. The Icelandic Central Bank confirmed that "it is prohibited to engage in foreign exchange trading with the electronic currency bitcoin, according to the Icelandic Foreign Exchange Act". On 12 March 2017, the Central Bank amended its rules. With the new rules, wide and general exemptions have been granted from the restrictions of the Foreign Exchange Act No. 87/1992. | |
| Legal ---- Bank of Lithuania released a warning on 31 January 2014, that bitcoin is not recognized as legal tender in Lithuania and that bitcoin users should be aware of high risks that come with the usage of it. | |
| Legal ---- The Norwegian Tax Administration stated in December 2013 that they don't define bitcoin as money but regard it as an asset. Profits are subjected to wealth tax. In business, use of bitcoin falls under the sales tax regulation. The Norwegian government stated in February 2017 that they would not levy VAT on the purchase or sale of bitcoin. | |
| Legal ---- The Swedish Tax Agency has given a preliminary ruling on Value Added Tax on bitcoins, stating that trade in bitcoins is not subject to Swedish VAT, but is instead subject to the Finansinspektionen regulations and treated as a currency. The decision has been appealed by the Swedish Tax Authority. The Swedish jurisdiction is in general quite favorable for bitcoin businesses and users as compared to other countries within the EU and the rest of the world. The governmental regulatory and supervisory body Swedish Financial Supervisory Authority have legitimized the fast growing industry by publicly proclaiming bitcoin and other digital currencies as a means of payment. For certain businesses interacting with fiat the current regulation dictates that an application for approval/license must be filed and all the AML/CTF and KYC regulations applicable to more traditional financial service providers must be followed. |
Southern Europe
| Country or territory | Legality |
| Legal ---- No regulation on the use of bitcoins. | |
| Legal ---- There is not a single word in Bulgarian laws about bitcoin. People owe 10% tax if they made profit trading. | |
| Legal ---- No specific legislation on bitcoins exists in Greece. | |
| Legal ---- Italy does not regulate bitcoin use by private individuals. | |
| Legal ---- , Malta does not have any regulations specifically pertaining to bitcoins. In 2017, the country's prime minister Joseph Muscat announced the approval of a national strategy to promote bitcoin and blockchain technology. Muscat specifically addressed the bitcoin blockchain's ability to handle, store and process sensitive data in an immutable and decentralized ecosystem. | |
| Legal No specific legislation on bitcoins or cryptocurrency exists in North Macedonia. In 2016 the National Bank of Republic of North Macedonia published a press release regarding an investigation it made into ONECOIN, and discouraged the citizens from investing in it since it was most likely a scam. In the same press release the NBRM quoted the law on Foreign Exchange Operations, but since cryptocurrencies do not constitute a foreign currency as they are quoted by the law, it leaves them unregulated. | |
| Legal ---- Bitcoin has no specific legal framework in Portugal. | |
| Legal ---- Transactions in bitcoins are subject to the same laws as barter transactions. |
Western Europe
| Country or territory | Legality |
| Legal ---- The Minister of Finance indicated that government intervention with regard to the bitcoin system does not appear necessary at the present time. | |
| Legal ---- The French Ministry of Finance issued regulations on 11 July 2014 pertaining to the operation of virtual currency professionals, exchanges, and taxation. | |
| Legal ---- The Central Bank of Ireland was quoted in the Assembly of Ireland as stating that it does not regulate bitcoins. | |
| Legal ---- The Commission de Surveillance du Secteur Financier has issued a communication in February 2014 acknowledging the status of currency to the bitcoin and other cryptocurrencies. The first BitLicence was issued in October 2015. | |
| Legal ---- , virtual currencies such as bitcoin do not fall within the scope of the Act on Financial Supervision of the Netherlands. | |
| Legal ---- , the government of the United Kingdom has stated that bitcoin is unregulated and that it is treated as a 'foreign currency' for most purposes, including VAT/GST. Bitcoin is treated as 'private money'. When bitcoin is exchanged for sterling or for foreign currencies, such as euro or dollar, no VAT will be due on the value of the bitcoins themselves. However, in all instances, VAT will be due in the normal way from suppliers of any goods or services sold in exchange for bitcoin or other similar cryptocurrency. Profits and losses on cryptocurrencies are subject to capital gains tax. An industry body called “CryptoUK” are aiming to improve the industry standards around Bitcoin. They have proposed a code of conduct that includes the provision of Anti-Money Laundering and extra security measures. |
Oceania
Australasia
| Country or territory | Legality |
| Legal ---- In December 2013, the governor of the Reserve Bank of Australia indicated in an interview about bitcoin legality stating, "There would be nothing to stop people in this country deciding to transact in some other currency in a shop if they wanted to. There’s no law against that, so we do have competing currencies." Beginning in April 2018, Australian digital currency exchanges must register with the Australian Transaction Reports and Analysis Centre and implement "know your customer" policies to comply with new anti-money laundering legislation. | |
| Legal ---- The Reserve Bank of New Zealand states: "Non-banks do not need our approval for schemes that involve the storage and/or transfer of value – so long as they do not involve the issuance of physical circulating currency." |