Recently, with the Bitcoin price rising again and briefly surpassing the $52,000 mark, discussions surrounding Bitcoin have become reinvigorated. Its market value has climbed to $1.015 trillion, surpassing several globally renowned companies such as Tesla (TSLA) and TSMC (TSM), making it the tenth most valuable asset in the world.
Source: https://8marketcap.com/
However, as of now, Bitcoin has not yet achieved a universally legal status worldwide. The journey towards its legalization is still fraught with challenges, and many countries have adopted strict measures to restrict various Bitcoin activities, particularly by prohibiting mining to curb the creation of new BTC.
Why does Bitcoin struggle to receive national endorsement?
01 Difficulty in Regulation
Bitcoin is not issued or controlled by any central institution or government, which contradicts the traditional monetary system, making it difficult for governments to regulate effectively.
Bitcoin’s anonymity makes it an ideal tool for illegal activities such as money laundering and illicit financing, and it is hard to trace. As a result, many regions impose restrictions on Bitcoin transactions, even going as far as a blanket ban.
02 Conflicts with Monetary Policy
The decentralized nature of Bitcoin can impact the implementation of national monetary policies, particularly during periods of economic instability when people may view Bitcoin as an alternative to circumvent risks associated with their national currency.
Bitcoin’s ability for cross-border payments can bypass exchange restrictions and fees in the traditional financial system. This poses challenges to many countries’ monetary policies, as the global transactions of Bitcoin may lead to capital outflow and, consequently, the devaluation of the national currency.
03 Security and Fraud Issues
Bitcoin transactions rely on the internet and blockchain technology, making them susceptible to hacker attacks and online fraud. According to statistics from SlowMist Security Company, there have been 1,441 hacking incidents in the blockchain field so far, with a total loss of about $31.93 billion.
04 Environmental Concerns
In the process of Bitcoin mining, a large amount of electricity is consumed, some of which comes from coal-fired power, leading to substantial carbon dioxide emissions. This environmental impact has become one of the main reasons for some countries to prohibit Bitcoin mining.
From the above analysis, it is evident that the difficulty in gaining widespread national recognition for both Bitcoin transactions and mining stems from its involvement in multiple complex areas such as law, economy, technology, security, and the environment.
Despite this, there are still some countries that maintain an open attitude towards Bitcoin. ViaBTC has compiled a list of regions where Bitcoin mining is currently legal. However, this is only the situation as of now, so please make sure you thoroughly understand and comply with the latest laws and regulations in your country or region.
Regions where Bitcoin mining is legalized
United States (majority of states): Most states in the United States have explicitly allowed Bitcoin mining activities, such as Texas, Missouri, and Mississippi. However, it is worth noting that there are differences in specific mining regulations and electricity costs among states.
Australia: The Australian government does not have specific laws targeting cryptocurrency mining, and mining activities are generally regulated by existing commercial and tax laws. Miners in the country need to comply with relevant tax laws and avoid tax evasion to prevent committing tax fraud.
Canada: In Canada, Bitcoin mining is legal. However, following the truck driver protest incident in 2022, Bitcoin mining companies and miners in some provinces of Canada are facing stricter legislative regulation.
Kazakhstan: In February 2023, the government of Kazakhstan issued new regulations, establishing a legal framework for cryptocurrency assets and their mining activities. This means that Bitcoin mining is legal in Kazakhstan, but miners and related enterprises must comply with local laws.
UAE: The UAE, being a politically stable and business-friendly country, adopts an open approach towards Bitcoin mining. Thanks to its abundant oil and natural gas resources, the UAE is becoming one of the preferred destinations for global Bitcoin miners.
El Salvador: El Salvador is the first country to adopt Bitcoin as legal tender and maintains an open attitude towards cryptocurrencies and related activities. According to Reuters, El Salvador is investing $1 billion in a public-private partnership to build one of the world’s largest Bitcoin mining farms.
In addition, regions where Bitcoin mining is legalized also include countries such as Iceland, Finland, Sweden, and Norway. It is important to note that the policies of some countries or regions may change. Therefore, before undertaking Bitcoin mining in any destination, it is essential to understand and comply with the latest local laws and regulations.
As of now, several countries including China, Morocco, and Nepal still prohibit activities related to cryptocurrencies like Bitcoin. It is believed that as cryptocurrencies continue to develop and international regulatory frameworks are gradually refined, more and more countries will start to accept cryptocurrencies such as Bitcoin.