Will governments capitulate and finally recognize Bitcoin as a legal tender?

[Similificator]

Since 2016, I have already been telling my peers that bitcoin being adopted in a worldwide scale happening is not a matter of if but matter of when. The inevitable will happen, while several minds will always have different motives and reasons, all will lead to a common outcome because bitcoin acts as a brige that connects their goals. The only problem is that there will always be people who would love to take advantage of anything they can and I am pretty sure that people in power or with great influence (mostly) will take advantage. I just hope that it won't be any more unreasonable as how it is today.

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[Silberman]

This, as I explained in another thread, makes it difficult for Bitcoin to be used as a day-to-day currency. In order to keep track of all transactions and pay taxes correctly you should rely on some App or some kind of software that keeps track of transactions and does the calculations for you. This means giving up your privacy and giving your purchase data to a centralized entity.

Holding BTC as disposable income for remittance payment, rather than as an HODL investment. $1,000 in bitcoin could be exchanged for $1,000 in stablecoin to avoid price swings. Then exchanged for BTC again for payment.

Governments only "capitulate" to the informed, motivated and organized public. If people become uninformed and unorganized enough for governments to get away with oppressing them. That often occurs.

For many years legalizing gambling was a common theme for how to boost local economies. Then legalizing and taxing marijuana became the common theme. 2021 we don't hear many proposals for legalizing gambling or weed. Everyone only talks about legalizing cryptocurrencies. This is what real progress looks like, am I right.

And even then it could be a false capitulation, this happened in Zimbabwe, after the disaster they created by printing money to the point their 100 trillion dollar bill became a symbol of what happens when a government losses complete control over their fiat, they capitulated and let people use dollars, euros and other currencies and then they abandoned their own, things were doing great until they had the great idea of introducing their currency again, with disastrous results as you may expect.

[oHnK]

Really it's only the developing nations with weak national currencies and troubled economies that are considering this.  There are no first world countries with a strong economy and a strong currency that are entertaining bitcoin as a viable national currency.  An optimist would call this "innovative" while a pessimist would call it "gimmicky."  I'm closer to the latter group, because at the end of the day, bitcoin won't solve these nation's economic woes, and it's not going to prove to be a very useful currency if it can't hold a steady value (unless that country is experiencing hyperinflation).

Yup, countries that have unstable economies that consider other currencies to be legal as their medium of exchange because basically the currency of a country is not only used according to its function, it is also the identity of the country.  Bitcoin is good as an investment option but to be used as a legal medium of exchange in many countries this is a very difficult task and takes a long time.  Although there are countries that have ratified it as a legal medium of exchange, it is not sufficient to represent the entire country.

[qwertyup23]

This question entirely depends on the laws/regulations of the country. When we mean by 'legal tender', it means that a person may be compelled to be paid using such currency since the government recognizes its validity and transaction on the country.

I do think that BTC, by being a legal tender, will pose problems in some countries especially in third-world and underdeveloped countries where access to such technology is hindered. When you rely something that is volatile as a legal tender, people might not opt to choose such option especially if they rely so much on their income. This is only beneficial to countries that are thriving economically where they can exercise BTC as a form of investment.

[watergold]

but that doesn't mean something like this is done like a total adoption.
bitcoin will indeed be one of the technologies that will increasingly be recognized, but the process running in every country will not be the same because what I believe for now is only countries that are still lagging behind in the economy or whose economy is low that will do that. like the example of elsavador which it is clear they are still lagging behind in the economy.
it's a different story with countries that still have high economic power, they may legalize it but only as an option and even they must have some who are against it and create a match for bitcoin as China is doing today.

[Botnake]

There is always an opposition against adopting Bitcoin in every country. As is the case in El Salvador not all accept Bitcoin but all have alternatives to using other available finance. I'm not sure for all countries really recognize decentralization that they don't fully control the rate of transactions. Because if they finally admit it, then at least there must be a tax that the government should get from it.

For those countries who had accepted and recognize bitcoin as a legal tender, then they are surely obliged to pay taxes on the government. But for those who are not, no tax will be collected. But even if means huge amount of tax from bitcoin, i think the government is not convinced yet to finally recognize bitcoin as a legal tender because bitcoin requires more transparency wherein the government don't have any. And for now, they are more focused on fiat that is fully centralized even if the rising inflation is becoming more inevitable.

[romero121]

We should not expect very fast acceptance. It takes time, just think of El Salvador. The country's government haave supported, but certain groups have been protesting an were against the decision. This is an example. Same as this different countries have varied varied views on bitcoin. To come to a common level of acceptance/adoption isn't simple. Countries that were against bitcoin usage have now on the process of legalizing its usage. Slowly this transition will happen with adoption as well.

[Rajamuda]

In my country, this is like a question that is really still vague on the answer. Bitcoin is still very closely related as a digital currency only that is valuable or like an asset that continues to accompany the business world or other income.
The government has very strong regulations, which is not easy to decide on something that still has certain risks like Bitcoin. Acceptance of Bitcoin as a legalized currency has indeed occurred in certain countries, well maybe here is the only consideration that distinguishes it, related to applicable government regulations.

[FanEagle]

I believe legal tender would be harsh, however accepting it as a currency that could be used in certain cases could be done. Think about it this way if I live in USA and can buy something with Euro then it is not a legal tender is it? I mean it sort of is but it is not exactly their national currency neither, I can go to whole world and exchange dollars and Euros for the national fiat of wherever I am which would make me a good profit in the end as well if I am trading it carefully.

Crypto is already sort of like that, as long as you can exchange it for fiat, then you should be considering it like a currency. Foreign currency exchanges in touristic places do usually have crypto these days and that is what matters to me.

[Silberman]

We should not expect very fast acceptance. It takes time, just think of El Salvador. The country's government haave supported, but certain groups have been protesting an were against the decision. This is an example. Same as this different countries have varied varied views on bitcoin. To come to a common level of acceptance/adoption isn't simple. Countries that were against bitcoin usage have now on the process of legalizing its usage. Slowly this transition will happen with adoption as well.

It is going to be a very slow process as we cannot expect governments to accept so easily that another currency can used on their territory as this could put their own national currency at risk, if anything what we are seeing at El Salvador is incredible as I did not thought that something like this will be possible so soon, but this also shows what it can be achieved once government support is reached, under those circumstances adoption skyrockets as what we have seen at El Salvador can show right now.

[tulusikhlas]

There is always an opposition against adopting Bitcoin in every country. As is the case in El Salvador not all accept Bitcoin but all have alternatives to using other available finance. I'm not sure for all countries really recognize decentralization that they don't fully control the rate of transactions. Because if they finally admit it, then at least there must be a tax that the government should get from it.

For those countries who had accepted and recognize bitcoin as a legal tender, then they are surely obliged to pay taxes on the government. But for those who are not, no tax will be collected. But even if means huge amount of tax from bitcoin, i think the government is not convinced yet to finally recognize bitcoin as a legal tender because bitcoin requires more transparency wherein the government don't have any. And for now, they are more focused on fiat that is fully centralized even if the rising inflation is becoming more inevitable.

Therefore, if the concept is in the application of Bitcoin in a country, then it is better to make it only an investment alternative. Because when they worry about the opposition trying to make the issue of shifting fiat money by Bitcoin. So when countries don't want Bitcoins as a legal payment, they can put Bitcoins only for investment alternatives as stocks do in general.

[izsara]

I believe legal tender would be harsh, however accepting it as a currency that could be used in certain cases could be done. Think about it this way if I live in USA and can buy something with Euro then it is not a legal tender is it? I mean it sort of is but it is not exactly their national currency neither, I can go to whole world and exchange dollars and Euros for the national fiat of wherever I am which would make me a good profit in the end as well if I am trading it carefully.

Crypto is already sort of like that, as long as you can exchange it for fiat, then you should be considering it like a currency. Foreign currency exchanges in touristic places do usually have crypto these days and that is what matters to me.

I'm not too surprised when Portugal can beat with such a landslide score considering the two teams are very different in terms of quality and especially for Ronaldo I can't say anything more about this guy, he always makes people chuckle for what he does in the field.

and for England, they have a lot of work to do, especially for finishing, which is like a scourge that England can't handle, especially during yesterday's match.
they are indeed very good both in possession and pressing but they are always weak in finishing.

[AicecreaME]

It's a subjective question. This matter really depends on what country we are talking about and what kind of government they have. For those developed and first world countries, it would really take time for their government to recognize and acknowledge bitcoin and other coins to be a legal tender since most of them mainly focus on growing their local currency and boosting it. Instead of accepting crypto, they would rather focus on their own currency and utilize it to make its purchasing power more efficient and strong.

In addition, most of them think that crypto don't really have that much value. And given its nature which is decentralized, they won't get to control it like what they usually do with fiat money when they need and want to - they just print out of thin air. I guess what's more likely to accept crypto as legal tenders are the ones who are still developing just like El Salvador and most likely Venezuela and Paraguay. Because they think that crypto will help their economy and its transition to digital world. They have seen its potential and they believe in it which is a brave move if i must say.

[Marvell1]

I believe governments have recently considered accepting BTC as a payment coin and as a means to be used as a legal tender. El Salvador I watched the developments in this country about The acceptance of BTC as payment coin and monthly salary for people in their country is gradually being accepted. But it seems that there are still some issues that have not been fully resolved so that some countries on their central bank side are still apprehensive about BTC.

[Semar Mesem]

With many government of the world will accept Bitcoin and other crypto currency as a legal tender but before then government will to regulate it's operation and other activities. If the happen issue of anonymity will no longer exist because government will have to know each every account owners to enable them the compliance for tax payment.

The first step that we are seeing now is the implementation of KYC, I believe that if the use of crypto becomes more massive, then to withdraw money, I need to have verified the address and so on, as long as it is not detrimental, of course, this is a good step and I hope that if the government enters crypto, it can do something. many things not only income from taxes but security of crypto users.

[LUCKMCFLY]

I believe governments have recently considered accepting BTC as a payment coin and as a means to be used as a legal tender. El Salvador I watched the developments in this country about The acceptance of BTC as payment coin and monthly salary for people in their country is gradually being accepted. But it seems that there are still some issues that have not been fully resolved so that some countries on their central bank side are still apprehensive about BTC.

You are right, in fact this is something very normal, I imagine that the president of El Salvador had to have foreseen all these scenarios, everything comes from changing the mental chip from the safe to the "volatile", from a traditional economy to an economy " deflationary ", in addition to that many people in El Slavador are going through a process that they have to learn much more about BTC, even so many still continue wasting the opportunity that the government is giving them, this is a unique opportunity that these people have , they really do not know the benefits that are being lost, more if they give the payments in BTC.

[Silberman]

It's a subjective question. This matter really depends on what country we are talking about and what kind of government they have. For those developed and first world countries, it would really take time for their government to recognize and acknowledge bitcoin and other coins to be a legal tender since most of them mainly focus on growing their local currency and boosting it. Instead of accepting crypto, they would rather focus on their own currency and utilize it to make its purchasing power more efficient and strong.

In addition, most of them think that crypto don't really have that much value. And given its nature which is decentralized, they won't get to control it like what they usually do with fiat money when they need and want to - they just print out of thin air. I guess what's more likely to accept crypto as legal tenders are the ones who are still developing just like El Salvador and most likely Venezuela and Paraguay. Because they think that crypto will help their economy and its transition to digital world. They have seen its potential and they believe in it which is a brave move if i must say.

This makes sense, powerful countries see all the money that is being generated in the industry and they want some of that money for themselves but at the same time they do not want bitcoin to grow and become even more powerful, this is a difficult dilemma and they have decided they will deal with this by regulating bitcoin to the extreme, but this means people will not want to use their money there, however the acceptance that other countries could offer is way more friendly and this means that over the long term users and businesses will tend to gravitate towards the countries which are more friendly to them.

[Abiky]

After El Salvador regulated Bitcoin as legal tender, other countries are tempted to follow in its footsteps:

Brazil Set To Adopt Bitcoin As Its Legal Tender

Panama unveils bill to make Bitcoin legal tender

Ukraine could soon become the second country to adopt Bitcoin as legal tender

Obviously these are countries that have seen an opportunity, but it is much more difficult for countries like the USA, EU countries, Australia, etc. to do so. So far Bitcoin has been regulated in most countries as (intangible) property. Consequently, it has also been taxed so that every time you spend Bitcoin you should declare and pay taxes. If you buy $1,000 of Bitcoin, the price goes up 10% and you buy a $5 coffee at Starbucks, you will owe taxes on 10% of that $5. If the next day the price of Bitcoin goes down and it is only 5% above your initial investment, when you make a purchase you will also owe taxes but only on 5%.

This, as I explained in another thread, makes it difficult for Bitcoin to be used as a day-to-day currency. In order to keep track of all transactions and pay taxes correctly you should rely on some App or some kind of software that keeps track of transactions and does the calculations for you. This means giving up your privacy and giving your purchase data to a centralized entity.

However, if Bitcoin is recognized as a legal tender, you will no longer have to pay taxes for buying coffees. In the same way that you don't have to pay taxes when you shop at the supermarket in dollars because the dollar has appreciated 2% against the euro in the last day.

I understand that the governments of the most economically powerful countries are going to be much more reticent than El Salvador and others who are seeing an opportunity.

On the one hand, if they make it legal to tender, they will lose money to be collected in direct taxes, and on the other hand they will lose at least part of the power they have with the massive printing of currency.

That is why I wonder if in the future, more and more countries will pass legislation that considers Bitcoin legal to tender and in the end the more economically powerful countries will have to capitulate and do the same.

What do you think?

I think other countries will watch El Salvador closely, in order to make their move. If adopting Bitcoin as legal tender becomes a long-term success, you can rest assured that countries in Latin America will do the same. For developed countries like the USA, UK, and Australia, that's another story. Their economies are going well without Bitcoin, so there would be no need to make it legal tender. Especially the US, where the US Dollar is going strong. It's hard to believe governments will give up Fiat in exchange for Bitcoin, since the latter is decentralized and outside of their control. As long as Bitcoin cannot be controlled by the government, the chances of being adopted as legal tender are slim. I'm fine with that as long as Bitcoin remains a decentralized and censorship-resistant cryptocurrency anyone can use worldwide. Just my opinion

[bitgolden]

On the one hand, if they make it legal to tender, they will lose money to be collected in direct taxes, and on the other hand they will lose at least part of the power they have with the massive printing of currency.

For good and services, the direct taxes will not get any impact because of adopt of bitcoin in my understanding. One probable solution for governments is they will enforce to register our bitcoin addresses with their ledger and then will enforce to do all bitcoin transaction through that addy only. You may have 100s of BTC addys but when you are going to buy a product the merchant will accept payment only from your registered bitcoin addy. So, your BTC spending could be monitored at some level and from that government will tax you.

This is based on an assumption like, you may hold as much as bitcoins but you may need to pay tax for what ever amount that you are going to spend.

So, governments may come forward without much hesitations when they will find more proper solutions to tax us wherever applicable even we are living with decentralized money.

[onecall123]

No one makes fun of it. Blockchains exist, but none one get competitor. Authorities don't want a competition to their fiat. It will either be taken over or banned in favor of making their own digital currency, which has already been implemented by the central banks. The Chinese government banned crypto to buy the dip and announce the e-yuan as backed by the government. But nothing is impossible.