Ethereum is the world’s second-largest cryptocurrency platform by market capitalization. As Ethereum (ETH) and other cryptocurrencies gain popularity, governments around the world have started to make decisions on the legality of its use. Depending on the country and the corresponding legislation, Ethereum might be illegal or legal to use in that particular country. In this article, we are going to look at the countries where Ethereum is banned or legal.
Different Blockchain regulations across regions
The legal status of Ethereum changes from country to country. Every country has its own policies, rules and regulations in regards to cryptocurrencies. Generally, the legality of ETH and other digital assets decently depend on whether the country has established official regulation of blockchain assets or not.
In countries that do not have any regulations in place, Ethereum is often classified as a legal asset. However, given the fact that it is a decentralized asset, it might be difficult to use or trade it in the country. Usually, just owning ETH is allowed and nothing beyond that.
In jurisdictions which have crypto regulations, Ethereum is usually treated as a digital asset and taxation framework for it is often put in place. A good example is the United States, where the Internal Revenue Service (IRS) has designed a taxation framework for cryptocurrencies. Furthermore, certain jurisdictions might class Ethereum as a currency and set restrictions in regards to its use.
In this article, we will explore the countries where Ethereum is either banned or legal in more detail.
Countries where Ethereum is Banned
China
China has a complicated relationship with cryptocurrencies. On one hand, the Chinese government supports blockchain technology and is actively working on ways to leverage its potential. On the other hand, the Chinese government has banned all forms of cryptocurrency activities, including trading, exchanging and raising funds through ICOs. The Chinese government has also banned cryptocurrency websites, and any activities or transactions connected to them. This means that Ethereum cannot be traded, owned or used in any way in Mainland China.
Bangladesh and Algeria
Bangladesh and Algeria have also banned all forms of cryptocurrency activities. In Bangladesh, the central bank has stated that it does not recognize any cryptocurrency as a legal tender, and therefore, buying, selling, trading and using cryptocurrencies, including Ethereum, is illegal. In Algeria, the central bank has issued a statement warning citizens against using cryptocurrency, describing it as “invasive”. As a result, owning, trading and using Ethereum is not legal in these two countries.
Countries with Soft Restriction of Ethereum
Thailand
Thailand has a leeway when it comes to Ethereum. While the Thai government has not established any precise laws and regulations in regards to cryptocurrency activities, it has placed certain restrictions on them. According to the Thai Securities and Exchange Commission, trading, exchanging and raising funds through ICOs has been officially banned. However, buying and selling Ethereum is permitted. Furthermore, Ethereum is allowed to be used as a payment method in certain businesses in Thailand.
Vietnam
The situation in Vietnam is very similar to Thailand. The Vietnamese government has not implemented any laws and regulations concerning cryptocurrencies. However, trading, exchanging and raising funds through ICOs is prohibited. In addition, buying and selling Ethereum is allowed. Although it is not a legal tender, there are certain businesses that accept Ethereum as a payment method.
Countries where Ethereum is Legal
Canada
In Canada, the use of cryptocurrencies has been officially authorized. Canada has a well-developed digital currency sector, and Ethereum is among the most popular digital assets in the country. In addition, the Bank of Canada has announced that it is working hard to launch its own cryptocurrency, the so-called digital Canadian dollar. Based on the existing legislation, Ethereum is considered as a legal asset, and all cryptocurrency activities, including buying, selling, trading, exchanging and raising funds through ICOs, are allowed.
Singapore
In Singapore, Ethereum and other cryptocurrencies are recognized as a legal asset. The country has established a dedicated working group, which is responsible for studying the potential of digital assets and developing regulations for them. Moreover, the Monetary Authority of Singapore (MAS) has created the Payment Services Act, which is a legal framework which regulates cryptocurrency activities, including buying, selling, trading and raising funds.
Switzerland
In Switzerland, Ethereum is seen as a foreign currency, and as a result, it is officially recognized as a legal asset. This means that buying, selling, trading and using Ethereum are all allowed and regulated. The Swiss government has taken a proactive approach towards the development of the digital currency sector, and has created the Blockchain Act, which outlines the legal framework for cryptocurrencies.
As the popularity of Ethereum continues to grow, the legal status of ETH and other digital assets is changing from country to country. While certain countries, such as China, Bangladesh and Algeria, have banned all forms of cryptocurrency activities, other countries, such as Canada, Singapore and Switzerland, have established legal frameworks for digital currencies. In countries that lack established regulations, usually just owning Ethereum is allowed and nothing beyond that. Ultimately, before using Ethereum, it is important to check whether it is legal or illegal in the respective country.