Regulation of Bitcoin in Selected Jurisdictions

Where Bitcoin is legal



Under the National Constitution of Argentina[1] the only authority capable of issuing legal currency is the Central Bank[2]. Bitcoins are not legal currency strictly speaking, since they are not issued by the government monetary authority and are not legal tender. Therefore, they may be considered money but not legal currency, since they are not a mandatory means of cancelling debts or obligations. Although bitcoins are not specifically regulated, they are increasingly being used in Argentina, a country that has strict control over foreign currencies.[3] According to some experts[4] a bitcoin may be considered a good or a thing under the Civil Code,[5] and transactions with bitcoins may be governed by the rules of the sale of goods under the Civil Code.


There are no specific laws or regulations regarding Bitcoin in Belgium.

The Belgian Finance Minister, in response to a question by a Belgian senator, stated in July 2013 that while the Bitcoin system seems to be somewhat problematic as a potential tool for money laundering and other illegal activities, such problems should not be overstated. He also stated that, based on studies from the Belgian central bank (Banque nationale de Belgique) and the European Central Bank, the bitcoin does not present any significant risks to price stability, to the financial system in general, or to its individual users. Finally, in this same statement, the Minister of Finance indicated that government intervention with regard to the Bitcoin system does not appear necessary at the present time.[6]


On December 3, 2013, the central bank of China and four other central government ministries and commissions jointly issued the Notice on Precautions Against the Risks of Bitcoins. Defining it as a special “virtual commodity,” the Notice said that by nature the bitcoin is not a currency and should not be circulated and used in the market as a currency.

Banks and payment institutions in China are prohibited from dealing in bitcoins. The Notice required that, at this stage, financial and payment institutions may not use bitcoin pricing for products or services, buy or sell bitcoins, or provide direct or indirect bitcoin-related services to customers, including registering, trading, settling, clearing, or other services; accepting bitcoins or using bitcoins as a clearing tool; and trading bitcoins with Chinese yuan or foreign currencies.

The Notice further required strengthening the oversight of Internet websites providing bitcoin registration, trading, and other services. It also warned about the risks of using the Bitcoin system for money laundering.[7]


The use of bitcoins is not regulated in Cyprus. On December 11, 2013, the Central Bank of Cyprus issued a statement on bitcoins, stating that “it considers the use of any kind of virtual money as particularly dangerous, given that it is not under any regulatory system and its operation is unchecked.” [8]


The Finish Tax Authority, Vero Skatt, has issued instructions for the taxation of virtual currencies, including the bitcoin. When transferred to another currency, the rules on taxation of capital gains apply. When the currency is used as a form of payment for goods and services, it is treated as a trade, and the increase in value that the currency might have gained after it was obtained is taxable. The sale of bitcoins at a loss in value compared to the original purchase price is not deductible under the Finish Income Taxation Act, because such a loss in value is not specifically described as deductible in the Act.[9]


There are no specific laws or regulations regarding the Bitcoin system in France.

Banque de France, France’s central bank, has recently released a report on the bitcoin, warning about the dangers of such “virtual currencies.” This report explains that the bitcoin cannot be considered a real currency or means of payment under current French laws, and criticizes it as a vehicle for speculation as well as an instrument for money laundering and other illegal activities. This report also suggests that the conversion between the bitcoin and real currencies should be considered a payment service, which therefore could only be performed by payment service providers authorized and supervised by the French Prudential Supervisory Authority (Autorité de contrôle prudentiel et de resolution). This would help limit the risk of fraud during the sale or purchase of bitcoins, and also help ensure that such operations are subject to existing regulations regarding money laundering and terrorism financing.[10]

A 2011 court decision that is mentioned in the Banque de France report found that a company that acted as an exchange for bitcoins should be considered a payment service provider, subject to oversight from the French Prudential Supervisory Authority. [11]


In a written response to Iceland’s Morgunblaðið newspaper, the Central Bank of Iceland reportedly stated that engaging in foreign exchange trading with bitcoins is prohibited, based on the country’s Foreign Exchange Act, which sets forth general restrictions on foreign exchange trading and capital movements between Iceland and other countries. According to the Bank’s statement, “[i]t does not appear that the provisions of the Act that exempt goods and services from the aforementioned restrictions can be applied to trading in the bitcoin or that other exemptions from restrictions of the Act apply to such transactions.” [12]


A spokesman for Bank Indonesia reportedly issued a statement on Bitcoin in December 2013, saying that “bitcoin is a potential payment method, but it’s different than ordinary currency… It is not regulated by the central bank so there are risks… At the moment, we’re studying bitcoin and we have no plan to issue a regulation on it.” [13]


The Central Bank of Ireland has not published a statement on its website regarding bitcoins. However, it was quoted in the Dáil Éireann (the Assembly of Ireland, the principal chamber of the Oireachtas, the Irish Parliament) as stating that it does not regulate bitcoins, and they are not considered to be legal tender within the European Union.

The Revenue Commissioners in Ireland are monitoring the development of the bitcoin and considering its implications for possible taxation, with the most likely areas of taxation being in the taxation of any gains, as well as value-added tax, which is a charge on goods and services. The government did raise concerns about the use of bitcoins and noncompliance with tax laws, but reported that it was advised that “currently, the threat posed to the Exchequer is likely to be small. It is probable too that for some evaders, it represents a new opportunity for existing non-compliance, rather than a new form of evasion.”[14]


There are at present no laws in Japan regulating the use of bitcoins. Haruhiko Kuroda, governor of the Bank of Japan (BOJ), recently stated that BOJ was “researching issues of bitcoins, but I have nothing to say regarding bitcoins at the moment.” [15]


It appears that Nicaragua has not yet promulgated any legislation regulating bitcoins, nor has the Central Bank of Nicaragua issued any rulings or guidelines on the subject. However, news reports indicate that bitcoins are being used in the country.

The Nicaraguan daily El Nuevo Diario reported on January 13, 2014, that an American banker, Greg Simon, recently bought a 1,200-square-meter plot of land in San Juán del Sur, one of the most important tourist areas in Nicaragua, for 80 bitcoins, currently the equivalent of about US$72,000. Simon is reportedly interested in promoting the use of bitcoins in Nicaragua and advanced some ideas related to their use. The article indicated that the real estate agency involved in the transaction, Century 21 Nica Life Realty, has received many emails from people welcoming the sale and from others interested in using bitcoins to buy land in San Juán del Sur.[16]


The Norwegian Tax Authority has issued a principle statement that bitcoins will be treated as capital property, at least for tax-related purposes. Capital property legislation allows for deductions for losses and taxes on winnings. Although travel currencies are exempted from the capital gains tax, bitcoins are not as the bitcoin and other virtual currencies are not recognized as travel currencies. Also, the sale of bitcoins by a commercial actor is subject to 25% value-added tax (VAT) as the trade in bitcoins on a Web-based site is an electronic service subject to VAT and not a VAT-exempted financial service. (Bruk av bitcoins – skatte- og avgiftsmessige konsekvenser [17],

South Korea

There are at present no laws in South Korea regulating the use of the Bitcoin system. However, the president of the Bank of Korea recommended at a press conference on December 12, 2013, that the bitcoin be regulated in the future. [18]


As of January 13, 2013, Taiwan had not passed any legislation regulating the use of bitcoins. On December 30, 2013, the Central Bank of the Republic of Taiwan and the Financial Supervisory Commission (FSC) issued a warning to the public about the risks in dealing with bitcoins. The regulators said the bitcoin is not a real currency, but a “highly speculative virtual commodity.” The general public was warned about the specific risks associated with accepting, trading, or holding bitcoins. If financial institutions use bitcoins, according to the warning, the Central Bank and the FSC may, in accordance with laws and regulations, take necessary regulatory actions at the appropriate time. [19]


See Also on BitcoinWiki


  2. Ley No. 24.144, Carta Orgánica del Banco Central de la República Argentina (Law No. 24,144, Charter of the Central Bank of the Republic of Argentina) art. 30, Oct. 13, 1992
  3. Bitcoin: Fiebre Argentina por la Máquina de Dinero Digital
  4. See, e.g., Andres Chomczyk, Situación Legal del Bitcoin en Argentina, ELBITCOIN.ORG, (Oct. 10, 2013)
  6. Question écrite no. 5-8723 de Martine Taelman du 16 avril 2013 au ministre des Finances
  7. 关于防范比特币风险的通知
  8. Cyprus Central Bank Warns About Risks in Use of Bitcoin, Famagusta Gazette (Dec. 10, 2012)
  9. Vero Skatt, Inkomstbeskattning av virtuella valutor
  10. Banque de France, Les dangers liés au développement des monnaies virtuelles: l’exemple du bitcoin
  11. Id., referring to SAS Macaraja c/ SA Crédit Industriel et Commercial, Tribunal de commerce [Commercial Tribunal] Créteil, 2è ch., Dec. 6, 2011.
  12. Höftin stöðva viðskipti með Bitcoin
  13. Faisal Maliki Baskoro
  14. Dáil Debates 126
  15. Summary of Bank of Japan Press Conference, at 10
  16. Andrea Sepúlveda, Nicaragua Ya Acepta Moneda Virtual Bitcoin, El Nuevo Diario
  17. Use of Bitcoins – Tax Issues
  18. Hanun “chongbu pit’uk’oin kyuje mandu rora”
  19. 比特幣並非貨幣,接受者務請注意風險承擔問題