Bitcoin is a popular digital currency; there’s no universal agreement about whether it must ever be recognized as legal tender. The journey of bitcoin to become the legal tender has always been rocky and, to a certain extent, risky.
Making Bitcoin legal tender means when somebody wishes to pay for the cup of coffee, then they may use bitcoin to pay. Without the central bank declaring BTC as a legal tender, the risk of accepting bitcoin for goods sold will be with shopkeepers. If the central bank has declared BTC as a legal tender, it becomes the official exchange value within this economy. To ensure the safety in trading Bitcoin, you may use Bitcode Methods, the most recommended trading platform online.
How can bitcoin become a legal tender?
For Bitcoin to become a legal tender, governments must officially accept and regulate this currency as a form of payment. Until now, just some governments have acknowledged BTC as the legal type of currency. Switzerland, Japan and Malta are some countries that recognize and accept Bitcoin.
Another issue for Bitcoin to become legal tender is related to the unpredictable fluctuations in value. Legal tender must maintain stable buying power to keep up with the economic demand. It means that Bitcoin, whose value will rise and drop because of market speculations, isn’t fit to serve as legal tender since it can’t sustain buying power over the long term. In addition, if the government adopts BTC as the legal tender, they are still determining who holds this, creating security risks that a few governments might not be very keen to take.
Which countries accept BTC as legal tender?
Bitcoin is a digital currency that is made and held electronically. This currency has become increasingly popular recently, and its acceptance as legal tender has risen. A few countries have gone beyond just recognizing BTC as the mode of payment – they have also accepted this currency as legal tender.
A notable example is Japan which became the first nation to accept BTC as legal tender in 2017. However, while doing so, the government granted it the same status as other fiat currencies, like the Japanese Yen. It means that it will be used to buy goods and services and is subject to taxation. Since then, many other countries have also followed suit, like Australia, Singapore, and New Zealand.
Situation in other countries
In Europe, there are still no countries that are going to accept BTC as a legal tender. But, most countries have become quite open to ideas. For instance, the Netherlands currency issued a statement that indicates that it will start to accept Bitcoin as the payment method for some of the products and services. Additionally, Germany has taken a few steps to make this simple for people to buy or sell Bitcoin, with their government recognizing this currency as the “unit of account”. Even in the United States, BTC is only partially recognized as a legal tender. However, the Commodity Futures Trading Commission still treats it as a commodity. This currency can be purchased and sold on an open market. However, it isn’t officially recognized as a currency.
Although few countries accept BTC as legal tender, many countries are starting to recognize this as a legitimate payment. It can increase in the coming years, as many countries are open to the idea of digital currencies. In the meantime, it’s essential to know the rules that every country has in place, especially when using Bitcoin.
Bitcoin to become a legal tender
Bitcoin’s digital and decentralized nature makes it quite an attractive currency. Its inability to meet standard conditions of the legal tender and to have transparent and verifiable ownership will keep this from becoming the globally recognized legal tender. So, to become the official mode of payment, Bitcoin has to be accepted and regulated by many countries. Governments must set these conditions and verify the ability to keep the value stable. Despite its potential, it may take several years or decades for this currency to become legal tender. So, you can see that for bitcoin to become a legal tender, some countries need to pass the regulation, though some countries have already accepted bitcoin as a legal tender.