Bitcoin is the closest anything except the US dollar has ever come to being a de facto ‘global currency’. Yet no country officially accepts Bitcoin as legal tender. Now there are some countries, like Venezuala, that are teetering on the edge and may need to resort to using cryptocurrencies to replace its own fiat. But the reality is, Bitcoin is not an official currency in any country.
If you want to know what Bitcoin is and how does it work, check out this simple explanation.
So the answer to which country’s official currency is Bitcoin is the obvious ‘none’. However, that doesn’t mean cryptocurrencies aren’t used and accepted widely in various countries. Additionally, the future of cryptocurrency is largely based on the regulatory direction of blockchain technology. Countries like the US and Japan have been positive about cryptocurrencies, while countries like Namibia and Bolivia have already banned it.
Why are cryptocurrencies not officially accepted?
To understand the answer to this question, we should think about what cryptocurrencies offer:
- Unlimited, instant access to financial movement for anyone (emphasis on anyone).
- Doesn’t have to be part of any institution. Doesn’t have to have citizenship, official identity, government issued clearances, or anything. You don’t even have to be a human to set up a Bitcoin wallet.
- Ability to transact any amount with anyone in the world.
- Freedom to use any currency, and not a government sanctioned one. Especially important in economically and politically unstable regions.
Governments aren’t going to make a currency like the above (which fits most cryptocurrency) an official ‘legal tender’ because they have a vested interest in maintaining their own currency reserves. Every country has reserves of their own currency, as well as gold and other commodities.
There are many countries where the majority do not have access to banking, and therefore cannot buy Bitcoin with a credit card. In those cases, the best place to buy Bitcoin are usually peer to peer websites like localbitcoins – a sort of Craigslist for trading cryptocurrencies face to face. Although it isn’t the fastest (or safest) way to buy Bitcoin, it’s still the only option for people in countries where it’s explicitly banned, like Bangladesh.
The official legality of Bitcoin in various countries
While Bitcoin is not legal tender in any country, and most likely never will be, it’s legal to own and use in the major economies of the world. Regulation is slow but gradually expected. The unregulated and manipulated cryptocurrency markets are increasingly entering the organized financial ecosystem.
Some countries where Bitcoin are officially outlawed:
- Indonesia (illegal as a payment tool, not to hold/trade)
- Vietnam (illegal as a payment tool, not to hold/trade)
Will Bitcoin ever become an official currency?
Trends indicate that countries are slowly starting to embrace cryptocurrency and blockchain technology, but not the financial implications of this “crypto-economy”. India’s Finance Minister, Arun Jaitley, said on Feb 1 2018: “The government does not recognise cryptocurrency as legal tender or coin and will take all measures to eliminate the use of these cryptoassets in financing illegitimate activities or as part of the payments system,” meaning India is bullish on the tech but will clamp down on illegal activities such as money laundering.
The association of cryptocurrency with illegal activities like money laundering, drug financing and terrorist trade, despite having much greater utility than that, means that governments will be wary of endorsing Bitcoin. However, countries are slowly coming up with official, state-sanctioned cryptocurrencies, such as Venezuela’s “Petro”. A dynamic relationship between a state’s fiat reserve and its cryptocurrency might be the solution we need before the world looks at moving onto cryptocurrency full time.