This is a common question for people new to Bitcoin to ask, and understandably so. Especially with all the ever eye-catching Press about ‘Bubbles’, fraud, tax-evasion, money laundering and use of Bitcoin on the so-called ‘Dark Web’.
The quick and easy answer is: Yes, Bitcoin is currently legal in almost every territory around the world. However, with that “Yes”, comes the age-old caveat of “so long as you don’t do anything illegal with it”. Funnily enough, this happens to be the case for any currency we might be more familiar with. Whether that’s $USD, £GBP, or €EUR.
Bitcoin is often tarred with a negative brush, sometimes rightly so, but often as a result of historical associations or misconceptions. Unfortunately for Bitcoin, one of its longest standing headaches and a big stumbling block for its public relations; has been it’s historical association with the ‘Silk Road’. You may well have heard before of the website known as ‘Silk Road’, the Dark Web marketplace for purchasing drugs, illegal services or other illicit goods. Indeed, back in the heyday of Silk Road, the website only accepted Bitcoin as it’s method of payment.
The FBI ultimately took down Silk Road in 2013, however the negative association remains for Bitcoin. This is something the wider Bitcoin community have worked hard to remedy in recent years.
It is certainly true that Yes, in its early days Bitcoin was the ‘go-to’ currency of many criminals, but the currency itself is not illegal. To put it into relatable perspective, just think of how many billions of $USD or £GBP have been utilised by criminals to pay for crime, drugs or launder money over the years. Yet we’d all agree that those currencies are not the root cause of criminal activity or illegal in themselves.
Bitcoin occupying a ‘Grey Area’, at least for now
There is however a grey area which Bitcoin does currently occupy. This has arisen because Bitcoin remains largely un-regulated in many countries and jurisdictions. In many cases around the world, tax laws, and laws governing the trading of cryptocurrency are yet to be agreed upon and set in place.
This is to be expected at this stage – Bitcoin and the wider cryptocurrency markets are still in their infancy. Most governments and financial institutions have yet to catch up and decide how they view Cryptocurrency.
Change is on the horizon
It is currently legal to buy, sell and mine Bitcoin in most territories around the world. However it is also anticipated that future regulation and / or law enforcement on some aspects of Bitcoin are on the horizon. Large numbers of people will welcome these changes, laws and guidelines with open arms. They are nothing new.
For example – the enforcement of financial regulation and approval on the traditional stock markets and financial institutions is well established in other financial markets. It has most certainly helped to keep our fiat money and other traditional assets safe and insurable for many years now.
If governments and financial institutions decide to take a similar approach, this will likely add confidence and support to the case for Bitcoin. These changes may very well be the tipping point, which give everyday consumers the confidence to invest in and adopt Bitcoin on a mass-market scale.