Bitcoin Legal Basics: Russia and Asia
The Asian continent (we’re including Russia here, too) features multiple governments and central banks who are not altogether excited about their citizens using Bitcoin.
The Asian continent (we’re including Russia here, too) features multiple governments and central banks who are not altogether excited about their citizens using Bitcoin. Russia, Thailand, India and Vietnam all comprise a significant slice of humanity for whom owning and using Bitcoins could be a problem.
Elsewhere on the continent, governments and central banks have taken much more open positions on the cryptocurrency. Below is a round-up of what we know about the positions of certain countries other than China, which we have already covered.
In January, the Russian government announced that it would impose strict limits, of about USD$30 per day, on the trading of anonymous digital currencies. Furthermore, the central bank announced that business dealing with such vaguely defined currencies would be considered as laundering money and/or possibly supporting terrorism. A week later, the general prosecutor’s office said Bitcoin was not legal tender and thus not usable by legal persons in Russia.
Vietnam outright forbade financial institutions from using Bitcoin in late February. Businesses cannot render services or sell products in exchange for any currency other than the VND, the government has said. Owning Bitcoin for personal use seems to be legal, however.
The Reserve Bank of India announced at the end of 2013 that Bitcoin exchanges in the country were neither regulated nor approved; within a few days, there were raids on certain Bitcoin businesses in the country. Owning and using BTC in the country seems to be legal, but local entrepreneurs are pushing for regulatory clarity regarding what they can and cannot do with cryptocurrenices.
“Thailand’s stance on Bitcoin is difficult to understand,” BitLegal.io writes. Exchanges have received contradictory letters from the Thai government regarding the legality of their businesses, and Thai citizens have been warned against using digital currencies, which are not considered legal tender in Thailand.
In February, the Central Bank of Jordan reported it had told all Jordanian financial institutions that dealing in digital currencies is prohibited within the kingdom.
In February, the Bank of Indonesia reversed a three-year-old law that said all financial transactions must be conducted in the rupiah, indicating that Bitcoin transactions were legal, though the currency does not constitute legal tender, according to the government.
The central bank in Malaysia has warned consumers against the risk of cryptocurrencies but maintains a hands-off policy toward regulation.
“Singapore is one of the most vocal nations with respect to giving Bitcoin users crucial regulatory information,” BitLegal.io writes. Exchanges and ATMs are subject to KYC and anti-money laundering laws in Singapore. Also, gains from trading and selling are subject to income tax, but income from investments constitutes capital gains, which are not taxed.
The Inland Revenue Authority of Singapore (IRAS) has outlined its tax policy, which BitLegal.io sums up as follows:
- “Buyers and sellers of Bitcoins are taxed on their gains at regular income rates as profits from a trade or business, unless the Bitcoins are held for investment purposes - in which case any gains are capital and exempt from tax;
- IRAS considers Bitcoins to be a taxable service, similar to digital music downloads;
- The Singapore Goods and Services Tax (GST) applies to both sales of Bitcoins for money, and to sales of goods and services for Bitcoins as a barter exchange;
- Any Bitcoin sales by a business resident outside of Singapore will be considered as a sale of services outside of Singapore, and not subject to the GST.”
The Bank of Korea has simply said it does not recognize Bitcoin.
In March, the Philippine government issued a warning to consumers about the risks of dealing with cryptocurrencies but said that exchanges are unregulated. It also warned the consumers have no protection against losses as a result of this non-regulation stance.
An announcement in March from the Prime Minister’s office said that commercial banks would not be able to offer Bitcoin as a service, as the government does not consider it legal tender. Two weeks later, the government also said banks should report any suspicions they have that a client might be laundering money with digital currencies.
The Liberal Democratic Party of Japan has also announced that it does not plan to regulate Bitcoin, at least for the foreseeable future.