Bitcoins have since its inception made a tremendous impact in market trade, this amplifies, the reason why it is leading the global market as the most popular and widely accepted cryptocurrency. With the current surge in the market capitalization of digital currency, through its pricing and various token created, there is little wonder why people would want to know how legitimate this ever-growing aspect of technology is.
Admittedly, nobody is allowed to create or distribute fiat money that is the sole responsibility of a single entity which is the central bank. But the mechanism which bitcoin uses is different, anyone with an excellent computing power can mine currency at the comfort of their home as long as they’re part of that community. In passing that judgment of whether bitcoin is legal or not, depends on three significant questions; who you are, what part of the world you are, what you do with it. This write-up is focused on the legal issues of bitcoin and the view of governmental authority, with the United States in view.
Concerns about Bitcoin
Some governmental authorities and regulatory bodies are still finding it difficult to understand the mechanism behind bitcoin operation, to ascertain if it could be termed as a legal tender or not. Especially in the area of the decentralization where regulatory bodies have no power or control over how much is being traded or unveiling the face behind the transaction. This also has a domino effect on people’s fund, we’ve heard of cases in the past where people get defrauded. The mt.gox that occurred in 2014, where people had to path with their cash, after an apparent fraudulent act carting away over 744,000 of its user’s bitcoin.
The Role Users Play
As a user what you choose to do with your bitcoin as an underlining effect on the way the regulatory authority is labeling it. You can utilize your bitcoin in the following ways;
As A Means Of Purchase
The US treasury department’s financial crimes enforcement network (FinCEN) in 2013, explicitly stated that digital currency is convertible into fiat currency. They also emphasized that purchase made with the use of digital money such as bitcoin is entirely legal. You can purchase legal products through the use of digital currency. For example, in the United States, we have restaurants that accept bitcoin as an exchange for purchase, and it is accepted in some online stores such as Shopify, OkCupid, and overstock.
As A Means For Investing
Following the legal guidance stated above, it is legal to invest with your bitcoin. The regulatory authority in compliance with the anti-money laundry agency demands that customer’s policy must be verified. Investing and trading with bitcoin requires getting verified through an existing bank account and a means of identification.
Collecting Bitcoin As A Means Of Payment
It is legal to accept bitcoin as a means of payment for products. With a simple clause “the products must be legal.” Sellers are expected to pay taxes on the amount of bitcoin they receive from their buyers.
Although bitcoin, is still not accepted as a legal tender in some parts of the world, it doesn’t negate the fact that is a legitimate means of trade. Before you invest or trade in bitcoin ensure you get yourself informed on the cross-border regulations if it’s not accepted in your side of the world.