Interest in cryptocurrency has exploded in recent years. The Pew Research Center estimates that 9 out of 10 Americans have heard of crypto. From Matt Damon’s infamous Super Bowl ad to President Joe Biden’s executive order in March asking the government to look into the risks posed by digital currencies, crypto is a hotter topic now than ever before.
We have spent dozens of hours gathering the most relevant and useful information about cryptocurrency and its legal status worldwide. The viability, legality and even practicality of cryptocurrencies are still hotly debated. As a growing number of countries become more receptive to crypto, albeit to varying degrees, a deeper understanding of the legal status of crypto where you live will help you make the right decisions when considering whether this asset is right for you. Before we take a look at the legal status of crypto around the world, let’s start with the beginning.
A Brief History of Cryptocurrency
To better understand where we are going, we need to know where we have been. The following timeline will give you some context and show you how cryptocurrency (or at least the concept of digital money) has been around longer than any of us have been alive.
- The concept of electronic money goes all the way back to 1983, when it was proposed by computer scientist David Chaum.
- In 1989, Chaum sought to make his vision a reality by founding DigiCash, the first company to use cryptographic protocols, such as public and private keys, to complete transactions electronically. DigiCash was never able to grow its user base and declared bankruptcy in 1998, and was sold for assets in 2002.
- In use since 2009, bitcoin is the oldest decentralized cryptocurrency, setting the standard for crypto as we know it.
- In August 2014, the UK commissioned a study on cryptocurrency and the role it could play in its economy, focusing on regulation and consumer protection.
- In June 2021, El Salvador became the first country to adopt bitcoin as legal tender, although the de facto adoption by the people has been a challenge for the Salvadoran government.
- In September 2021, China declared all cryptocurrency illegal.
- In March 2022, Biden signed an executive order calling for measures to ensure the protection of consumers and investors, as well as exploring the possibility of a US central bank digital currency.
Legal status by country
It is easiest to name the countries where crypto is outright illegal. According to the US Library of Congress, as of November 2021, a total of nine countries have outright banned cryptocurrency. These countries are Algeria, Bangladesh, China, Egypt, Iraq, Morocco, Nepal, Qatar and Tunisia. Another 42 countries have an implicit ban on the asset, usually by not allowing financial institutions in the given country to take on crypto companies as clients.
In general, wherever crypto is legal, it is subject to:
- Anti-Money Laundering (AML) Regulations: This allows authorities to keep an eye on crypto traders to prevent illicit financial activity.
- Tax: Taxes on cryptocurrency vary from country to country. For example, in the United States, the IRS taxes crypto as property, not income. However, several countries in the EU tax it as income, without value added tax (VAT). A VAT is a tax on goods and services, hence the contrast to how it is treated in the US
| Jurisdiction | Official ban? | Implicit prohibition? | Does tax law apply? | Do AML/CFT* laws apply? |
| Algeria | Yes | no | no | Yes |
| Bahrain | no | Yes | NOW | Yes |
| Bangladesh | Yes | no | No information | Yes |
| Benin | no | Yes | No information | No information |
| Bolivia | no | Yes | no | no |
| Burkina Faso | no | Yes | No information | No information |
| Burundi | no | Yes | No information | No information |
| Cameroon | no | Yes | No information | No information |
| Central African Republic | no | Yes | No information | No information |
| Chad | no | Yes | No information | No information |
| China | Yes | no | Unclear | Unclear |
| Ivory Coast | no | Yes | No information | No information |
| The Democratic Republic of the Congo | no | Yes | No information | No information |
| Ecuador | no | Yes | no | no |
| Egypt | Yes | no | no | Yes |
| Gabon | no | Yes | No information | No information |
| Georgia | no | Yes | Yes | no |
| Guyana | no | Yes | no | no |
| Indonesia | no | Yes | no | no |
| Iraq | Yes | no | no | Yes |
| Jordan | no | Yes | no | no |
| Kazakhstan | no | Yes | no | no |
| Kuwait | no | Yes | NOW | Yes |
| Lebanon | no | Yes | no | Yes |
| Lesotho | no | Yes | no | Yes |
| Libya | no | Yes | no | Yes |
| Macau | no | Yes | Unclear | Unclear |
| The Maldives | no | Yes | No information | No information |
| Mali | no | Yes | No information | No information |
| Moldova | no | Yes | no | no |
| Morocco | Yes | no | no | Yes |
| Namibia | no | Yes | no | Yes |
| Nepal | Yes | no | No information | No information |
| Niger | no | Yes | No information | No information |
| Nigeria | no | Yes | no | no |
| Oman | no | Yes | NOW | Yes |
| Pakistan | no | Yes | No information | no |
| Palau | no | Yes | no | no |
| Qatar | Yes | no | no | Yes |
| Republic of the Congo | no | Yes | No information | No information |
| Saudi Arabia | no | Yes | NOW | Yes |
| Senegal | no | Yes | No information | No information |
| Tajikistan | no | Yes | no | no |
| Tanzania | no | Yes | no | no |
| To walk | no | Yes | No information | No information |
| Tunisia | Yes | no | no | Yes |
| Turkey | no | Yes | VAT: no Other tax laws: yes |
Yes |
| Turkmenistan | no | Yes | no | no |
| United Arab Emirates | no | Yes | Yes | Yes |
Crypto as currency for everyday use
Daily purchases with Bitcoin are becoming a more common sight than ever before. Many avenues facilitate this, including:
- Coinmap, a site that lets you find places near you that directly accept crypto as payment
- Crypto debit cards, which allow you to use your cyrpto to pay anywhere Visa or Mastercard are accepted, are done by converting the crypto in your wallet to dollars upon purchase
- Sites like Bitrefill and CoinGate, which allow you to buy gift cards with your crypto
All of this provides convenient ways to use your crypto as cash, but if what you’re looking for is a quick way to buy crypto with your cash, you’ll be happy to know that according to Coin ATM Radar, there are over 38,000 crypto ATMs worldwide world.
Final thoughts
All emerging technology inevitably goes through some growing pains. The introduction of any new system has the same risk-reward ratio that applies to investments. With cryptocurrency, you get that ratio double, as it is both a relatively new technology and an investment. As with new technology, education is the cornerstone of good decision-making.
We hope the facts in this post helped you learn a little more about cryptocurrency as a whole and set you on the path to deciding if crypto is right for you. If you enjoyed what you read here – and I hope you did if you made it this far – please consider sharing this with your friends and family.
