Despite widespread hype, the question is, Are Cryptocurrencies Legal? The answer varies from jurisdiction to jurisdiction. In fact, there are no laws that regulate cryptocurrency in all countries. Only one, El Salvador, has legalized Bitcoin, the first such country. Other countries are still drafting cryptocurrency laws. Here are a few factors to consider. Using cryptocurrency is an excellent way to increase your purchasing power and save on international shipping.
The legality of cryptocurrency varies from country to country, but in most places it is considered a commodity and investment asset, and therefore subject to relevant tax legislation. In 2013, the United States Treasury classified Bitcoin as a convertible decentralized virtual currency. Since then, the United States has instituted various tax laws and regulations for digital assets. In Canada, for example, citizens are not allowed to purchase or trade virtual currencies with credit cards.
While cryptocurrencies are a relatively new industry, legal clarity is still lacking in many areas. For example, the IRS classifies Bitcoin as property. As such, it is treated similarly to stock or bond offerings. But supporters of virtual currencies argued in court that this classification was wrong. But the IRS has not yet issued a definitive answer. And until such a ruling is issued, the question remains: Are Cryptocurrencies Legal?
The adoption of cryptocurrencies as legal tender could have huge implications for the global economy. Countries such as Estonia and Switzerland have recently announced plans to create their own digital currencies. The hope is to compete with Bitcoin and other digital currencies. After all, they use cryptography to secure transactions and control the creation of new units. Blockchain technology is the foundation of most cryptocurrencies, making them potentially immune to government intervention. If legalized, these new forms of currency could eventually replace banknotes and physical currency.