Bitcoin is the most popular form of online currency used worldwide. While Bitcoin was not initially regulated or taxed, many countries have been implementing rules and regulations out of fear that Bitcoin, as well as other forms of virtual currency, will be used for tax evasion, money laundering, and the black market.
The UK was among the first to choose to impose a 20% “value added tax” on Bitcoin, but the United Kingdom is quickly shifting that approach. This means that Bitcoin and other digital currencies would be treated as if they are assets or private funds as opposed to vouchers that are taxed in the same manner as money.
Many find this shift in regulation as a surprise, since it is the opposite direction many countries are heading. It is not only the concern of tax evasion and illegal activity that have many countries worried, but also consumer concerns of troubles that are associated with digital currency, such as theft and fluctuations in value.
The concern is so extreme that Russia has banned Bitcoin altogether.
The U.S. is one country that has yet to determine its stance, although the matter may become more pressing as online gambling continues to thriving domestically in a select few regulated markets.
While some advocate for strict regulation, the Treasury Department currently has no regulations in place. Some states such as New York, are working on their plans to regulate digital currencies.
One of the many perks of Bitcoin and other forms of online currency offer is the lack of regulation. So it will be interesting to see how its popularity and rate of growth will be affected once more regulatory measures are introduced in different countries around the globe.
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