Bitcoin is the world’s first decentralized currency and its popularity is pegged on the fact that it is an apolitical and borderless currency. The nature of Bitcoin and cryptocurrencies, in general, sends jitters down the spine of most governments and this explains why most central banks continually issue warnings about crypto assets. These warnings are usually out of fear that this new currency might encroach on their turf. So far, only the Japanese government has recognized Bitcoin as legal tender. But the fact that a country doesn’t recognize Bitcoin as legal tender doesn’t mean it is illegal either.
Bitcoin IS Legal
Legal tender is money that can be accepted as a form of payment for debt within the jurisdiction of the said payment. So the answer to whether or not Bitcoin is legal tender can have a yes and no answer. Since most governments do not recognize Bitcoin as a legit currency, it can be argued that it is not legal tender. However, if two people agree to enter a transaction using Bitcoin, then Bitcoin can be said to be legal tender for both of them.
Most governments do not know what to do about the cryptocurrency revolution. Let’s take China for example. In 2017, the government cracked down on all Chinese based exchanges like BTC China, Huobi, OKCoin, and ViaBTC thereby forcing them to suspend their order books of trading cryptocurrencies against the Yuan. But interestingly, this crackdown only targeted the businesses that were trading cryptos while individuals were left alone. By 2018, the government had changed its view of digital currencies and now private users are allowed to use it. Today, individual traders and investors continue to exchange digital assets one-on-one via chat applications like WeChat and Telegram. This is a great example of the futility of trying to restring Bitcoin trading.
As much as some governments may want to restrict the use of cryptocurrencies, it is almost impossible for them to actually enforce it because of the decentralized nature of cryptos. Anyone with access to the internet can use Bitcoin so unless the government is willing to shut down the internet, the use of Bitcoin will continue irrespective of any advisory from central banks. In fact, after some countries like Bolivia, Ecuador and India made Bitcoin trading illegal, it became apparent that it was not actually possible to stop the use of digital assets and so some countries are now designing their own digital assets.
Any new revolutionary technology is bound to be misunderstood and misrepresented. And this is exactly what is happening with Bitcoin. Most first world countries have decided to take a back seat to see how the technology will play out. On realizing that that Bitcoin can’t be wished away, the developed nations are now thinking of coming up with a way of regulating its use. For instance, France is now spearheading talks at the G20 forums to establish parameters of regulating digital assets. Even though regulation of digital assets is a far-fetched concept, it serves to demonstrate the longevity of Bitcoin and other cryptocurrencies – they are here to stay. So for now, we can continue trading Bitcoin with no worry of the big nations interfering with it any time soon.