Legality of cryptocurrency by country or territory

• 1. Introduction

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  The legality of cryptocurrency varies so dramatically from one country to the next that a transaction perfectly legal in Switzerland could land someone in jail in Bangladesh. In some places, bitcoin is recognized as legal tender, accepted at the national level the way a dollar bill is. In others, banks are forbidden from touching it, exchanges have been shut down by the hundreds, and anyone caught using it faces criminal prosecution. The same digital asset, the same code running on the same global network, treated as private money in one capital and a financial crime in another.

  How did governments around the world arrive at such wildly different conclusions? What do those differences reveal about how nations think about money, sovereignty, and financial control? And who, exactly, gets to decide what counts as currency in the first place? Those are the questions this documentary will pursue, across Africa, the Americas, Asia, Europe, and the Pacific.

• 2. What Counts as Money

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  On the 7th of March 2014, the Japanese government issued a cabinet decision on the legal treatment of bitcoin in response to formal questions posed in the National Diet. The ruling was careful and narrow: bitcoin was neither a currency nor a bond under existing banking and financial instruments law. Yet it also acknowledged that no law unconditionally prohibited individuals or businesses from receiving bitcoin in exchange for goods or services.

  That careful splitting of hairs became a template. Across dozens of jurisdictions, regulators found that cryptocurrency was simply unlike anything their existing legal categories had been built to handle. Germany's Finance Ministry declared in August 2013 that bitcoin was a "unit of account" and qualified as "private money" usable in "multilateral clearing circles." The Bundesbank, by contrast, rejected even that framing and recommended the term "crypto token" instead. Slovakia's central bank concluded that bitcoin lacked the legal attributes of currency, while simultaneously noting that European legislation did not define the activities associated with virtual currency at all.

  The U.S. Treasury had already classified bitcoin as a convertible decentralized virtual currency in 2013. The Commodity Futures Trading Commission followed in September 2015 by classifying it as a commodity. The Internal Revenue Service treated it as property. In a single country, three separate federal bodies arrived at three different classifications. A U.S. Supreme Court opinion in the case of Wisconsin Central Ltd. v. United States, issued on the 21st of June 2018, noted in passing that the definition of money has changed over time and that perhaps one day employees will be paid in bitcoin or some other type of cryptocurrency. That a sitting court raised the possibility at all signaled how seriously the question was being taken at the highest levels.

• 3. The Banning Impulse

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  Algeria's official journal of the 28th of December 2017 was unambiguous: "The purchase, sale, use, and holding of so-called virtual currency is prohibited." The law went further, defining virtual currency by what it lacked, the absence of physical support such as coins, notes, or credit card payments, and made any breach punishable under existing laws and regulations.

  Morocco moved in the same direction over those same weeks. On the 20th of November 2017 the exchange office declared that transactions via virtual currencies constituted an infringement of exchange regulations subject to penalties and fines. The following day a joint statement from the Ministry of Economy, Bank Al-Maghrib, and the Moroccan Capital Market Authority warned that bitcoin could be used for illicit and criminal purposes, including money laundering and terrorist financing. On the 19th of December 2017, Abdellatif Jouahri, governor of Bank Al-Maghrib, told a press conference in Rabat that bitcoin was not a currency but a "financial asset" and called for a consumer protection framework.

  China's approach moved through stages before reaching an outright ban. The People's Bank of China prohibited financial institutions from handling bitcoin transactions in December 2013. In April 2014 it ordered commercial banks and payment companies to close bitcoin trading accounts within two weeks. By September 2017, cryptocurrency exchanges were effectively banned, and 173 platforms had been closed by July 2018. In early 2018, the State Administration of Foreign Exchange, led by Pan Gongsheng, moved to crack down on bitcoin mining, and many mining operations in China had stopped by January of that year. A complete ban on cryptocurrency trading and mining took effect on the 24th of September 2021.

  Bangladesh Bank said in September 2014 that anybody caught using virtual currency could be jailed under the country's strict anti-money laundering laws. Nepal went furthest of all among Asian nations: the use of any cryptocurrency is simply illegal there, full stop. In April 2018, Iran's central bank banned the country's banks and financial institutions from dealing with cryptocurrencies, citing money laundering and terrorism financing risks. Turkey's central bank issued a regulation on the 16th of April 2021 banning the use of cryptocurrencies directly or indirectly to pay for goods and services, citing possible "irreparable" damage and transaction risks, effective the 30th of April 2021.

• 4. Legal Tender Experiments

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  El Salvador's Bitcoin Law was passed on the 8th of June 2021 and took effect on the 7th of September 2021, making bitcoin legal tender in the country. The results in that first month were mixed at best. The Salvadoran Foundation for Economic and Social Development reported that 12 percent of Salvadoran consumers had used the cryptocurrency, but 93 percent of companies surveyed reported receiving no payments in bitcoin at all.

  The Central African Republic moved in a similar direction in April 2022, when parliament voted for a cryptocurrency law that was formally promulgated on the 27th of April, officially making bitcoin legal tender. The experiment was short-lived. In April 2023, the CAR agreed to repeal the adoption of bitcoin as legal tender.

  Fiji's Prime Minister Sitiveni Rabuka is a proponent of cryptocurrencies and planned to make bitcoin legal tender as soon as 2023. Tonga similarly planned to make bitcoin legal tender by the end of 2023, a goal that had been in discussion since late 2021. Both the Marshall Islands and Vanuatu officially supported the use of blockchain technologies including cryptocurrencies, and the Marshall Islands went so far as to recognize decentralized autonomous organizations as legal entities.

  The contrast with Central America's other nations could not be sharper. In October 2017, Costa Rica's central bank issued a statement that bitcoin and cryptocurrencies are not considered currencies, are not backed by law, and cannot be traded on Costa Rica's national payment system, with the bank emphasizing that anyone who used cryptocurrency did so entirely at their own risk.

• 5. Regulation as a Middle Path

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  Switzerland offers one of the clearest examples of a jurisdiction that chose to engage rather than prohibit. Bitcoin businesses there are subject to anti-money laundering regulations and, in some cases, must obtain a banking license. In December 2013, forty-five members of the Swiss Parliament submitted a proposal calling on the government to evaluate opportunities for the financial sector to use bitcoin. The Swiss Federal Council responded in June 2014 with a report concluding that virtual currencies were not in a legal vacuum and that no further legislative measures were needed at that time. In 2016, the city of Zug added bitcoin as a means of paying city fees, framing the move as a step toward positioning the region as a hub for emerging technologies. Swiss Federal Railways, the government-owned rail company, went as far as selling bitcoin at its ticket machines. By June 2021, a record 100 Exchange Traded Products and crypto structured products were offered on the SIX Swiss Exchange with a total trading value of CHF 4.6 billion.

  Gibraltar became the first country in the world to provide a tailored regulatory framework for businesses using distributed ledger technology, having done so back in 2018. Japan's Payment Services Act, updated in April 2017, required cryptocurrency exchange businesses to register with the government, maintain records, take security measures, and protect customers, while also mandating compliance with anti-money laundering law.

  In December 2022, Brazil established a licensing regime for virtual asset service providers with the aim of legalizing crypto as a payment method. Ukraine's president Volodymyr Zelenskyy signed the Virtual Asset Bill into law on the 16th of March 2022, and in June 2025 the Verkhovna Rada registered Draft Bill No. 13356 to allow the National Bank to hold and trade virtual assets as reserve assets. By September 2025, the Rada had approved Bill No. 10225-d in first reading, establishing a VASP framework with an 18 percent personal income tax plus a 5 percent military levy on first-year fiat conversions, with virtual-to-virtual and small transactions exempt.

• 6. The Tax Question

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  In October 2015, the Court of Justice of the European Union ruled that the exchange of traditional currencies for bitcoin units is exempt from VAT, and that member states must treat transactions relating to currency, bank notes, and coins used as legal tender as similarly exempt, effectively classifying bitcoin as a means of payment rather than a commodity for VAT purposes. The ruling had direct consequences for how member states could design their own tax treatment.

  Finland's approach illustrated one common path. The Finnish Central Board of Taxes ruled in Ruling 034/2014 that commission fees charged by bitcoin exchange markets were banking services under the EU VAT Directive and therefore VAT exempt. A bitcoin transaction itself, however, was treated not as a currency trade but as a private contract equivalent to a contract for difference. Purchases of goods with bitcoin, or conversion to legal currency, "realizes" the value and makes any price increase taxable, but losses are not tax-deductible. Mined bitcoin is taxed as earned income.

  Israel's Tax Authority stated in 2017 that bitcoin would be taxed as a taxable asset rather than a currency or financial security. Each time a bitcoin is sold, the seller must pay a capital gains tax of 25 percent. Miners and traders are treated as businesses subject to corporate income tax and a 17 percent VAT. Romania specified in January 2019 that income from trading virtual currency falls under "income from other sources," with a 10 percent income tax applied only to the positive difference between the selling price and the acquisition price, and profits under 200 RON per transaction that total under 600 RON in a fiscal year are exempt. Malaysia's Federal Territories Islamic Religious Council announced in 2024 that cryptocurrencies can be used to pay zakat, prescribing a zakat rate of 2.5 percent, the same rate applied to other tradable commodities.

• 7. Financial Crime and the Regulatory Pressure

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  In 2013, the G7's Financial Action Task Force issued guidelines stating that internet-based payment services allowing third-party funding from anonymous sources may face an increased risk of money laundering and terrorist financing, and that this "might pose challenges to countries" in regulating and supervising those risks. That warning set a frame that governments around the world would return to repeatedly.

  In Canada, companies dealing in virtual currencies must register with the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC), implement compliance programs, keep required records, report suspicious or terrorist-related transactions, and determine whether any of their customers are politically exposed persons. The law applies even to non-Canadian virtual currency exchanges if they serve Canadian customers. Banks may not open or maintain accounts with virtual currency companies that are not registered with FINTRAC.

  By 2018, U.S. FinCEN director Kenneth Blanco stated that money services businesses doing a substantial amount of business in the country, including cryptocurrency exchanges, money transmitters, and anonymizing services known as mixers or tumblers, were required to register with FinCEN as money services businesses, design and enforce an anti-money laundering program, and file Suspicious Activity Reports and Currency Transaction Reports. FinCEN was receiving more than 1,500 such reports per month involving cryptocurrencies. Seventeen other countries had adopted similar anti-money laundering requirements.

  In the United Kingdom, the Financial Conduct Authority declared in March 2022 that all cryptocurrency ATMs in the country were illegal, because none of the ATM operators had successfully registered with the agency. The FCA cited failures to comply with know-your-customer laws and the high risk to customers from a lack of regulation and protection. The European Parliament passed a proposal in 2016, by 542 votes to 51 with 11 abstentions, to set up a taskforce to monitor virtual currencies and combat money laundering and terrorism, sending it to the European Commission for consideration. By 2027, the EU plans to ban privacy-focused cryptocurrencies such as Monero and Zcash.

• 8. An Unsettled World

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  Russia's shifting stance over a decade illustrates how unstable these legal landscapes remain. As of November 2016, bitcoins were "not illegal" according to the Federal Tax Service. In September 2017, the Deputy Finance Minister said it was "probably illegal" to accept cryptocurrency payments. In January 2022, the Central Bank of Russia proposed banning all cryptocurrency issuance and operations outright, citing systemic financial risk. Bloomberg and Meduza reported that the Federal Security Service had pressed for the ban, arguing cryptocurrencies were being used to finance opposition movements and independent media. Then in February 2022, the Russian government reversed course and announced it would support, legalize, and regulate cryptocurrencies rather than ban them. By July 2024, Russia had regulated mining and permitted businesses to use cryptocurrencies in international trade, while keeping the existing ban on domestic cryptocurrency payments.

  India followed a similarly winding path. The Supreme Court lifted the Reserve Bank of India's ban on cryptocurrency trade in March 2020, a ban the central bank had imposed in early 2018. Finance minister Arun Jaitley had stated in his budget speech on the 1st of February 2018 that the government would do everything to discontinue the use of bitcoin and other virtual currencies for criminal purposes, while encouraging blockchain technology in payment systems. After the Supreme Court ruling, investment in cryptocurrency became legitimate, though significant ambiguity remained around taxation and the regulatory regime. Legal scholar and SAARCLAW Vice President Hemant Batra argued publicly that the cryptocurrency market had grown too large, with billions of dollars involved, for a complete ban to be practically achievable.

  The European Union's own trajectory shows how even coordinated regional bodies struggle to find a stable position. The European Banking Authority advised European banks not to deal in virtual currencies in July 2014, citing the absence of a regulatory regime. In January 2022, Erik Thedeen, vice-chair of the European Securities and Markets Authority, called for an EU ban on proof-of-work crypto mining to favor the proof-of-stake model and address climate concerns. By 2024, the EU had adopted new regulation and a new directive affecting cryptocurrencies. The picture that emerges across every continent is one of constant revision, of laws passed and then amended, of bans reversed and rules layered on top of earlier rules, as governments try to keep pace with a technology that has never waited for their permission.