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What is the legal concern about Bitcoin, and where can it be used legally?

3 November, 2020 Business

What is the legal concern about Bitcoin, and where can it be used legally?

 

The fiat currencies created across the globe are controlled and governed by the central banks or national governments. Through fiat currencies, people can easily buy and sell goods and services and invest it. No one can create fiat currencies other than the central banks, and if they try to do so, it is a law that we will become prisoners. Banks record fiat currencies, and they keep track of all records on why where and by whom the currency is used.

 

People desperately wanted a currency that involves no banks. A mysterious entity known as Satoshi Nakamoto introduced the bitcoin system that changed how to transfer and invest money. Many cryptocurrencies preceded bitcoin; it is still known as the first modern digital currency globally. Bitcoin is a decentralized currency that is not governed or controlled by third-parties. Bitcoins can be created with strong computing power and an active member of the bitcoin community. To trade in bitcoin, you can use Wealth Matrix.

 

Bitcoin is gaining huge attention, and as of 2020, it has entered into mainstreams. The businesses, agencies, government, and individuals accept bitcoins as a medium of exchange and are learning about its regulations and frameworks. But the main question that arises is, is bitcoin legal? Let us know the legal issues regarding bitcoin, and we will know about regulations in specific countries.

 

Legal Concerns about Bitcoin

The bitcoin network is a complicated one, and still, many authorities are trying to understand it in and explain more in legal concerns. Most of the people raise concerns about its decentralization. The government authorities are concerned about bitcoin because it is a financial community that doesn't involve them. No government is also an issue for some people as they worry about the protection of their funds.

 

When we talk about US-based bitcoin exchanges, the offshore platforms are not regulated. In history, there have been many reports filled about the exchanges hacking and keeping funds of people. This has led to the shutdown of many bitcoin exchanges.

 

Another big concern is that bitcoins make transactions possible semi-anonymously. The blockchain is a public distributed ledger, and it maintains transparency; the transactions are done anonymously. The records of transactions only record the amount of money and the public keys. Also, the dark web has gained attention and has become media attention. There have been increased sales of illegal drugs, weapons, and more because the bitcoin transactions involve no financial institution.

 

What are legitimate things or opportunities?

 

Investing

The Financial Crimes Enforcement Network of the US Treasury Department has issued some guidelines stating the investment can be made in bitcoin. The US-based bitcoin exchanged is required to abide by Anti-Money Laundering and the policies of Know Your Customer (KYC). In this way, people can invest and trade in bitcoins by verifying the ID and connecting it to their bank accounts. Also, the Securities and Exchange Commission (SEC) has advised the investors to be safe from fraudsters as they may target bitcoin wallet and attack funds.

 

Buying Goods

According to FinCEN's guideline, bitcoin is a convertible virtual currency used to purchase goods. The purchase of goods is not considered unlawful, and people are not called money transmitters. Buying legal goods and services is entirely legal. Bitcoin can be used as a medium of exchange, both online and offline. Also, the hotels, restaurants, businesses, and individuals accept bitcoin the same as fiat currencies.

 

Accepting payment for business

Bitcoin is legal, especially for business. Whether a business is of a small scale or large scale, all businesses can accept bitcoin payments. A well-established business that deals in legal goods and services can accept bitcoins as regular currency. The businesses that accept bitcoins is obligatory to pay taxes on the earned funds. The taxes can be paid in the form of bitcoin. Bitcoin is a decentralized virtual currency that businesses can accept as payment methods like accepting gift cards or cash.

 

Mining

The guidelines of FinCEN states that the miners that create a block of transactions and receive bitcoin as rewards and convert them into fiat currencies are called money transmitters. They are subject to unique rules and regulations that are different from normal ones.

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