Bitcoin is a decentralized digital currency that made its debut a decade back. Since then, many other crypto assets have also made their presence felt. While enforcement agencies, taxation authorities, and regulators all over the globe debate the best Bitcoin practices, the question still remains whether Bitcoins are legal or not. Bitcoins are legal or illegal according to the location and activities of users.

Bitcoins are never issued by any centralized banks or endorsed by them; they are generated through computers that solve complex mathematical problems to earn Bitcoins. So, Bitcoins do not exist in physical forms and this makes it best suited for conducting cross-border transactions. Buyers can buy products and services using Bitcoins and withdraw cash from Bitcoin ATMs today. The currency can be bought and sold on exchanges but there are no international laws regulating it. The bitcoin trade is also on the rise due to invention of automated trading bots. Read this bitcoin evolution review to know how bitcoin is traded using automated trading bots. So, when you wish to trade Bitcoins you need to first check whether it is legal or not in your country. 

Some countries have advocated the use of Bitcoins while in some, possession of this crypto asset may get you into a lot of trouble. Some nations have not yet bothered to regulate the Bitcoin.

Countries where Bitcoin is legal today:

- The US has always had a positive approach towards this cryptocurrency although many government agencies have tried to prevent its use in transactions. Businesses like the Microsoft Store, Dish Network, Overstock.com etc have welcomed Bitcoins as payment for their goods. The FinCen has been providing guidelines for Bitcoins since 2013. It defines Bitcoin as a business of money-services and not as a currency. It also placed it under the aegis of the Bank Secrecy Act whereby all payment processors and exchanges must conform to responsibilities like registration, reporting, and record keeping. Bitcoin also falls under property liable for taxation according to the IRS.

- Canada also has a friendly approach towards the Bitcoin, ensuring that it does not get used for money laundering purposes. Bitcoin is considered to be a commodity according to the CRA or Canadian Revenue Agency. So, transactions are basically barter transactions and income earned comes under business income. Since Bitcoins are money-service businesses, they fall under the scope of AML or anti-money laundering laws. Some banks have prohibited use of credit and debit cards for Bitcoins.

- Australia views Bitcoins as an asset and not as a currency or money; it is liable for capital gains taxations.

- The European Union: The ECJ had ruled that sale or buying of digital currencies would be exempted from VAT in all EU states. Individual countries have their own stances towards Bitcoin acceptance. In Finland, it is held as a commodity not as a currency. In Cyprus, Bitcoin has no regulations while the FCA in UK has a pro-Bitcoin approach. In Germany it is legal but taxed in a different way.

- Besides these countries, the other Bitcoin-friendly nations are Malta, Gibraltar, Japan, Switzerland, The Netherlands, Estonia, Lithuania, Slovenia, Bulgaria, Singapore, Bermudas, Belarus, Georgia, and Hong Kong. While some countries wish to embrace digital innovations, others fear that if they do not, they would lag behind in the race.