Bitcoin regulatory status around the world, January 16th 2014 update

USA: The US authorities coined Bitcoin as the currency of choice for criminal activity, and after the Silk Road seizure in October

The US authorities coined Bitcoin as the currency of choice for criminal activity, and after the Silk Road seizure in October 2013 it was believed Bitcoin would soon be prohibited in the US.

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The US’ opinion on digital currencies changed after US Congress held 2 hearings on Bitcoin. The first hearing resulted in Senator Tom Carpe calling it a “legitimate financial service”. The second hearing was held to help government officials get a better understanding on digital currencies and how they are used.

Shortly after PBOC’s initial announcement, Bank of America released a report calling Bitcoin a “major means of payment for Ecommerce.”

A congressional report was released on the matter of Bitcoin being a threat to the US dollar in December. The report rehashed and dove into the potential threats of Bitcoin on the economy. No regulations or statements were made following the report.

Since the report was published US online retailer Overstock and US-based social gaming platform Zynga games began accepting Bitcoin as a form of payment.

China was believed to have welcomed Bitcoin when local search giant Baidu began accepting Bitcoin in exchange for goods and services in October 2013. Their acceptance was cut short when PBOC announced that using Bitcoin as a currency would be deemed illegal, leaving it to be treated solely as a commodity. PBOC later strengthened their restrictions prohibiting payment service providers from providing payment solutions to local Bitcoin exchanges. It is currently legal to have and trade Bitcoin in China. However it is not possible to add funds to exchanges, or to use Bitcoin as a form of payment.

In September 2013 The Monetary Authority of Singapore (MAS), published concerns regarding the usage and trading of Bitcoin. The concerns were mainly security and financial issue that may arise. Just recently, MAS informed Singapore-based Bitcoin trading platform Coin Republic they are currently not intending to get involved with businesses who accept Bitcoin.

“Whether or not businesses accept bitcoins in exchange for their goods and services is a commercial decision in which MAS does not intervene.”
There is currently no regulation taxation or restrictions on trading, buying, and selling Bitcoin in Singapore.

Korean financial authorities released earlier on December 10th their stand on virtual currencies. The authorities stated Bitcoin does not have “intrinsic value” and lacks stability.

Currently Bitcoin is not illegal in Korea. However officials have pledged to monitor the state of Bitcoin, and will track any illegal uses of it, such as money laundering and purchasing of illegal substances.

Thai officials released a statement in July 2013, deeming Bitcoin illegal in Thailand. The Thai government pointed out the illegal activities associated to cryptocurrencies and its threat on the local economy as reason for the ban.

The Reserve Bank of India (RBI) released a statement on their concerns regarding cryptocurrencies. The concerns included security and technical issues that may arise.

“Since they are not created by or traded through any authorized central registry or agency, the loss of the e-wallet could result in the permanent loss of the VCs (virtual currencies) held in them,” RBI said today.
Similar concerns were released by Indian officials earlier this year, comparing Bitcoin and other cryptocurrencies to Ponzi-schemes, to which investors are bound to lose their money to cybercriminals.

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On December 27th Indian authorities raided India’s largest Bitcoin exchange,

Recently, Indian Exchanges have been able to resume limited activity.

In August 2013, government officials in Germany stated they would not recognize Bitcoin as a foreign currency. They did mention however that Bitcoin would be treated as “private money” or “unit of account” and it is possible the government will start taxing it.

The Bank of France released a statement shortly after PBOC’s announcement. Like other countries, France merely warned on the dangers and concerns surrounding Bitcoin and other cryptocurrencies. The Bank of France’s statement focused on anonymity concern associated to Bitcoin’s usage, mentioning how it can be used for money laundering and terrorist activities.

On the 15th of January 2014, the French senate held a hearing on the matter of Bitcoin. The hearing ended in the conclusion Bitcoin cannot be ignored nor be deemed illegal and needs to be regulated.

The Financial Supervisory Authority of Denmark released on the 17th of December a statement regarding the risks surrounding Bitcoin. The main concerns were related to security and safety issues, mentioning the unstable fluctuations, and the chance of losing Bitcoins to cybercriminals.

While stating their concerns, no mention of illegality was declared, making trading legal and no regulations to be imposed on Bitcoin usage.

Norwegian Director of General Taxation Hans Christian Holte, declared on December 16th that Bitcoin will not be recognized as a legitimate currency, and will be subject to Norwegian taxation.

“[Bitcoin] doesn’t fall under the usual definition of money or currency.” Hans Christian Holte.
Holte is rumored to be working with financial sectors from other countries on legitimizing the usage Bitcoin.

The Swiss parliament is currently voting on a postulate regarding the recognition of Bitcoin as a legitimate currency.
There is no word yet on the Swiss parliament’s decision.

Poland currently has no official stand on the subject of Bitcoin. A growing number of Polish businesses have already begun accepting Bitcoin as a means of payment, and government officials are currently looking into the matter closely.

“What is not forbidden is permitted. However, we certainly cannot consider Bitcoin to be a legal currency” Szymon Woźniak, an official from the Polish Ministry of Finance, mentioned in a seminar at the Warsaw School of Economics.

The Tax Administration of Slovenia released a statement on the 23rd of December regarding taxation of digital currencies. The statement did not mention concerns or illegality issue on Bitcoin. However the Slovenian government has devised a tax structure for Bitcoin.

The Slovenian government will not recognize Bitcoin as a currency or as an asset, and no capital gain tax will be requested. Other Bitcoin gains like businesses dealing with Bitcoin or Bitcoin mining will be subject to local taxation.

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