Is it true that what′s not forbidden is permitted? The current global status of cryptocurrencies
A fully decentralized currency whose flow is impossible to trace. However, it isn't clear where the money comes from and where it goes. How legal is their circulation?
It is rather difficult to give a straight answer to the last question because it is virtually impossible to validate this currency on the legislative level. The main reason for such equivocation is that there is still no definite answer to the question, “What is cryptocurrency?” Only countries with sustainable economies can afford to legalize crypto money.
In Switzerland, it is possible to pay for certain services and purchases with BTC at the shops. However, the payable amount is restricted. In 2013, Bitcoin was recognized there as a functional currency, and in 2016, the government introduced a tax relief for those who bring new cryptocurrencies to the market.
The Swiss authorities found a way to regulate Bitcoin by equating it with the valuable assets and securities. Big industrialists and corporations are among the largest investors in BTC since they are interested in having the asset, the value of which is constantly growing without their direct involvement.
Judging from the fact that in 2017 alone, the Swiss startups managed to attract more than a billion
USD to the country, it becomes fairly obvious whether or not it′s beneficial to legalize Bitcoin. This currency is also used for investing in different funds while the welfare of the country and its citizens is growing steadily.
In this country, cryptocurrencies are equated to a service. Why not, after all? The speed of transactions is fast while the money transfers are considered as a mere financial operation.
These conditions have attracted the attention of various startups as well as LocalBitcoins, which is one of the most renowned P2P exchange platforms. Also, the first ATM machine for Bitcoin in Europe is located there. It works using the Bittiraha service. Besides, the Finns are manufacturing ATM machines for Bitcoin exchange and sell them all over the world.
Sweden went even further by fully legalizing the cryptocurrencies and making them an official mean of payment. It was decided to take a bit stricter approach towards granting the license to operate cryptocurrency exchanges in order to regulate this process in a more efficient way.
The authorities are paying close attention not to the currency itself but rather to its holders, while the operation of platforms is deemed as less important. The government is not accumulating Bitcoin and other cryptocurrencies in the National Bank. Even if these currencies are being transferred to the public accounts, they must be immediately sold.
In Israel, all types of cryptocurrencies are in free circulation, which means that anyone can use them. At the same time, an individual, or a private party, is obliged to pay 25% sale tax when exchanging such currencies.
Moreover, it is necessary to present the proof of their origin as well as the origin of funds with which the cryptocurrency was bought. If you want to start mining or trading cryptocurrencies, it will be necessary to register as a legal entrepreneur and pay 17% VAT plus the profit tax. Obviously, it will amount to a hefty sum.
Decentralization is a cornerstone concept of all cryptocurrencies. That's why tracing the path of such currencies is a rather tough task. The US authorities tried to resolve this issue by linking the cryptocurrency accounts to their real owners. These regulatory efforts are aimed at establishing more efficient monitoring of financial activities.
Some states consider the possibility of allowing its citizens to pay taxes, purchase securities, and various licenses with Bitcoin. It will allow acquiring at least a partial understanding of the flow of money within the most unregulated area of finances.
In early 2017, this country gave Bitcoin the status of the official currency. Therefore, it is allowed to use it as the mean of payment along with the conventional currencies.
Cryptocurrencies haven't been legalized in Ukraine yet. However, the government of Ukraine was the first among the countries of the CIS to elaborate the legislative proposal concerning this issue. If adopted, the miners will be forced to declare their income and save all data regarding their financial operations over the last 5 years. At the same time, the National Bank of Ukraine (NBU) doesn′t recognize cryptocurrencies as the official mean of payments.
Cryptocurrency still evokes a lot of controversies because the alphabetic and digital code is not tangible. However, if such currencies become properly regulated on the governmental level, they will be beneficial to many people.
The official regulation would allow many cryptocurrencies with enormous capitalization to come out of the shadows. Many banks, the market players, who participate in cryptocurrency mining, as well as different financial institutions, will be definitely in favor of legalizing the digital money.