Bitcoins and Regulation.

Bitcoins and Regulation.

Are there regulations on Bitcoin?

Yes, just like any other software or company, Bitcoin also has to be subject to certain regulations in specific countries. Governments are now catching up since Bitcoin grew very fast in the recent years. After several Bitcoin money laundering schemes were unearthed, governments are planning on becoming even more strict in terms of Bitcoin regulations.

So, what’s the regulation on Bitcoin?

It all depends on where you live. Some countries favor Bitcoin and the transformation it brings, whilst others don’t. In this article, we’re gonna tell you exactly what you can and can’t do in your region! Keep reading!


The US is an interesting case in terms of regulation on virtual currency. That’s because different states in the US have different Bitcoin regulations. If you’re in Texas, Kansas, Tennessee, Montana or South Carolina, you have nothing to worry about. In these states, there’s pretty much no Bitcoin regulations. So, you’re free to use bitcoin as you want without any legal issues.

Then, there are some states who have at least some regulation for exchanges and brokers. Wisconsin, North Carolina, California, Pennsylvania and Florida are states that have some regulation but you can still use virtual currencies. That is, it’s not illegal, but there are taxes and bitcoin regulations that generally slow the process down. One such law is the KYC law, which stands for ‘Know Your Customer’. These states also have extensive AML regulations. These AML regulations essentially are ‘Anti-Money Laundering’.

It’s one of the reasons why so many bitcoin brokers ask for your national identification when you want to buy more than $100 of Bitcoin. Essentially, companies are required to register any person who’d like to purchase Bitcoins in order to make sure that there’s no fraud taking place. Since the ownership of Bitcoin is usually anonymous, these states try to eliminate the anonymity.

Hostile US States

Unfortunately, there are also states which are hostile towards virtual currency and have strict Bitcoin regulations. These states focus on tight monitoring and high taxes for companies that would like to carry business in their states. Hawaii, New Mexico, Connecticut, Georgia, Washington,  New York and New Hampshire are states that have tight Bitcoin regulations.

Some Bitcoin regulations that these states have are quite outrageous. One of them is the money transmitter license. In these states, the money transmitter license is usually very expensive and takes the time to be approved. Thus, most people don’t even get to buy their first bitcoin since the regulation requires them to pay high fees for the license.

By far the most hostile states are Hawaii and New Hampshire. In Hawaii, Bitcoin is illegal as a form of legal tender. That pretty much makes any exchange or store, where you can use bitcoins to pay, illegal.


The UK is pretty open in terms of Bitcoin regulations as of now. The UK doesn’t have any KYC regulation in place, neither does it have AML regulations in place. So you can pretty much carry out as many transactions as you like. You’re also free to use any cryptocurrencies as legal tender and trade using cryptocurrencies.

If you were to launder money in the UK, you can’t technically get arrested since there’s no law saying you can’t. That doesn’t mean you can go out and start laundering money. It’s still against the law and you might go to jail for fraud, so don’t try it.

According to experts at Cambridge, the startups in the UK are going after regulators to put in place essential Bitcoin regulations. Thus, it will only be a matter of a months before essential regulations such as AML are put into place. Fortunately for people in the UK, there’s hope that the UK will be supportive of the digital currency market.


In 2013, India was quite hostile towards Bitcoin. The Reserve Bank of India (RBI) warned the public against the use of virtual currencies because but have no real underlying value. The RBI also said that it would investigate these claims further and introduce Bitcoin regulations as soon as possible, if necessary.

Since India is a big market for cryptocurrencies and Bitcoin, financial institutions are now realising the need for bitcoin regulations. However, Bitcoin enthusiasts and prominent Bitcoin industry leaders claim that the regulations will be in favour of Bitcoin. Fortunately for Indian investors, the financial institutions don’t favour a total ban of the currency.

Rather, it is rumoured that they prefer to have AML and KYC laws in place in order to let Bitcoin become legal tender. Thus, Bitcoin’s future in India looks positive, but there hasn’t been an official declaration yet. Apparently, there is a team of bureaucrats who will release an official statement of their concerns and the relevant issues to address.

Quite recently, four of the leading companies in Bitcoin and blockchain related services came together to create the Digital Asset and Blockchain Foundation of India (DAFBI). This is an indication of the future of Bitcoin in India; therefore investors and enthusiasts are excited to hear that it will be legal.


In Brazil, you can freely buy, sell and trade Bitcoins for services or products. There are no specific laws or Bitcoin regulations that prevent people from doing so. Unfortunately, the government doesn’t have much power today in terms of controlling the illicit activities that might be happening right now.

Essentially, Brazil has named Bitcoin an asset but not a currency. Thus, regular asset laws apply to Bitcoin in Brazil. So if you want to invest into Bitcoin, it would be the same as investing in gold. The government would tax you 15% on capital gains as if it were an asset gaining value.

Since there are no AML laws either, there’s nobody monitoring money laundering. Thus, right now it’s pretty much legal to use Bitcoins and to trade using Bitcoin. However, in the future, this might change. Some rumors indicate that the Brazilian government is looking at a ban in the near future. However, this claim isn’t backed by any information released to the public.


Australia is in the same situation as India, there are no specific regulations already in place. However, the institutions have ideas in terms of what Bitcoin regulations to set. The government is now taking suggestions from the FinTech Advising Group in order to install regulations.

According to some at FinTech, the Australian government is primarily concerned by the absence of an AML law, the anti-money laundering law. Therefore, it’s pretty safe to assume that they would want to have regulations for eliminating the prospect of money laundering first.

Then, they might also put in place the KYC law, but there are no public statements made by the government proving this. But, it’s the first thing most governments do whilst tightening Bitcoin regulations.


Much like Australia and India, South Africa also doesn’t have any bitcoin regulations in place yet. However, the government has been working on increasing awareness about Bitcoin and the losses that can arise. This is due to the fact that South Africa doesn’t consider Bitcoin as legal tender.

So, it’s treated like an asset and you can pretty much do whatever you want with your bitcoins.

I think this does more good than bad. Unfortunately, launching slanderous campaigns about the dangers of Bitcoin naturally pushes people away. I think this move will prevent the use of Blockchain technology in South Africa since the people will be quite cynical about it.


Indonesia is one of the places where Bitcoin has really had an impact. The country has over 80% of the people unbanked and thus people look for a new system. Then, they found Bitcoin and since then the Rupiah has become the most traded currency for Bitcoin.

Indonesia has KYC laws in place, which permit the government to monitor transactions and make sure that money laundering is impossible. Thus, the people trust the government and use it to buy things. Although Indonesia doesn’t consider bitcoin as legal tender, you can use it to pay almost any merchant.

Since there’s not many banks, people in Indonesia are encouraged to carry out their purchases online with their digital currency. This is a real life example of how Bitcoin can be implemented to use in daily life by regular people. It’s the first representation of a partial adoption of Bitcoin in daily life.


Germany is one of the countries that are truly supporting and setting encouraging bitcoin regulations. The largest and most popular financial news network and platform now display Bitcoin live. The digital currency has also made it on the company’s ‘most important exchange rates’ box on the homepage.

The currency is considered as ‘private money’ by Germany and it’s recognized legally. Recently, however, Germany and France have been considering increasing regulations on Bitcoin and cryptocurrencies in the people’s interest.

From a report by the EC, there are allegations that the currency is used online for illicit activity, which was true. Bitcoin was indeed used by shady characters to purchase drugs, pornography, and chemicals but that’s changed now.

The advancements that Blockchain technology has brought to the table is undeniable and are quite helpful for society. Thus I do not think that Germany will finish by banning digital currencies but will certainly move to a more monitored or controlled environment around digital currencies.


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