The Top 3 Countries That Support Bitcoin

by Trading 101     Jan 06, 2020

When Bitcoin hit the mainstream media’s attention, the world watched with bated breath as to how governments and politicians would react to the new technology that came along with Bitcoin. Blockchain technology and cryptocurrencies represented both opportunity and threat and anyone getting into cryptocurrency trading 101 knew that government stances would be major influences on Bitcoin pricing.

With over 1000 cryptocurrencies existing in the market now, Bitcoin is still the major powerhouse that everyone defers to, having by far the largest market cap and name-recognition. Since then, regulators, government offices and politicians have been exploring the concept, trying to understand what the best way forward for them is.

One controversial topic that always arises when researching bitcoin to learn the trading 101 for it is tax and other legalities. Is Bitcoin taxed? Is it even legal? The answer relies mainly on one’s location and how one profits from Bitcoins in the first place. There is no regulatory board or anything that controls Bitcoin, which is a pro and a con in the bigger picture.

Bitcoin’s relative anonymity and advantages over a majority of the existing financial institutions make it attractive to all sorts of users and investors, including criminals. These factors play into the legality aspect of Bitcoin as well as they have to be considered. One thing that’s common across all countries that are relatively supportive of cryptocurrencies is that none of them allow Bitcoin as a substitute for the country’s legal tender and currency.

  • 1) The United States of America

The United States is a bit of a toss up in their stance on Bitcoin. While generally positive, several government agencies have expressed their intent in establishing methods of prevent the use of Bitcoin for illegal activities, such as drug trade, weapon sales and other nefarious activities. There are several large companies based in the United States that have opened their doors to accepting Bitcoin payments, including Dell, Overstock and Dish Network.

On the other hand, several internet giants such as Alphabet (Google), Facebook, Twitter and Reddit have all but decided to put a blanket ban on everything Bitcoin related: ads and payments most especially.

In the United States, Bitcoin is treated as a property for the purposes of taxation. It’s also not classified as a currency but as a financial service, meaning it’s legally part of the Bank Secrecy Act, meaning that owners of Bitcoin need to adhere to certain standards of reporting and record keeping.

  • 2) Canada

The United States’ neighbor is also in a generally positive or supportive stanc when it comes to Bitcoin and other cryptocurrencies. Canadas regulatory efforts have been similar to that of the States, focusing on preventing money laundering. Canada has a different classification for Bitcoin, wherein it’s considered a commodity for taxation purposes. Income generated from Bitcoins is classified as a form of business income and the level of taxation depends on whether an individual is in the business of buying and selling or purely investing.

  • 3) Several European Countries

Several countries in Europe have taken a Bitcoin-friendly stance recently. The European Union itself has not taken any official stance on the matter, allowing for countries to form their own regulations in the meantime.

Finland and Belgium, for instance, have exempted Bitcoin from Value Added Tax by classifying it as a financial service. Therefore, Bitcoin is largely untaxed in those two countries, making it an attractive option there for investors.

The United Kingdom has even gone a step further and has expressed a supportive stance of Bitcoin. Their desire is to have regulation in support of cryptocurrency, but at the moment Bitcoin falls under several tax regulations.

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