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

[TheGreatPython]

you may hold as much as bitcoins but you may need to pay tax for what ever amount that you are going to spend.

This sounds valid and practical because this is how a system should work. Governments will not be having any problem to make bitcoin is a legal tender when they are able to tax a bitcoiner. I guess in near future we might be having this kind of taxation system. I understand what you are mentioning is just a draft work still government may work on this kind of solution to fine-tune it and to enhance it so that they will find a suitable solution for taxation of crypto transactions.

If this will lead to a proper working solution for taxing of crypto transactions then I guess almost every country will go for making bitcoin a legal tender. This will definitely will take bitcoin into million-dollar levels.

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[wiss19]

Someone pointed out that superpower countries are going to be the ones that are not going to accept it. Take China for example, with the way they are going do you think that they will ever want to adopt Bitcoin as a legal tender? I don’t think so.

Most of these big countries are not going to do that, you should also imagine England choosing bitcoin over their pounds sterling, and the United States choosing it over the United States Dollar, how possible could that be? If you look at all these things you would see that it’s really not going to work as you think. That El Salvador did it doesn’t mean that others are also going to do the same thing.

[Silberman]

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

And that is fine with me, however we are going to have to see if in the future the US and other powerful countries begin to pressure El Salvador and other countries that could be potentially interested in adopting bitcoin as legal tender in order to not do so, after all we know the US government is very powerful and influential and they could use their soft power to slow down or outright stop the progress of bitcoin on that particular field.

[Abiky]

Someone pointed out that superpower countries are going to be the ones that are not going to accept it. Take China for example, with the way they are going do you think that they will ever want to adopt Bitcoin as a legal tender? I don’t think so.

Most of these big countries are not going to do that, you should also imagine England choosing bitcoin over their pounds sterling, and the United States choosing it over the United States Dollar, how possible could that be? If you look at all these things you would see that it’s really not going to work as you think. That El Salvador did it doesn’t mean that others are also going to do the same thing.

Developed countries like the USA and UK are simply too big to fail. What makes you think they'll abandon Fiat for Bitcoin? Their economies are going strong without Bitcoin in play, so it's unlikely they'll make the cryptocurrency legal tender in the future. For developing (third world) countries, that's another story. The main reason why El Salvador adopted Bitcoin as legal tender, is because the government wanted to save its economy. After all, Bitcoin is deflationary whereas the US Dollar is not.

I have a feeling other developing countries (mostly Latin American countries) will follow El Salvador's footsteps as their economies continue to sink. What matters is that Bitcoin remains decentralized and censorship-resistant. Only then, people can enjoy true financial freedom. Who knows if Bitcoin lasts for generations? Just my thoughts

[turneps]

Is Bitcoin Legal or Illegal? The answer – it depends on the user's location and activity.
Consumers have a greater ability to purchase goods and services with Bitcoin Although Bitcoin appears at a glance as a well-established electronic money system, there is still no unified international law governing Bitcoin.
Some countries have indirectly adopted the legal use of Bitcoin by enacting some regulatory oversight. Such as: United States, Canada, Australia, Venezuela, European Union, ...
While Bitcoin is welcomed in many parts of the world, some countries are wary of its volatility, decentralization, perceived threat to existing monetary systems and links to other currencies. illegal activities such as drug trafficking and money laundering. Some countries have completely banned digital currencies while others have tried to cut off any support from the banking and financial system necessary for transactions and use. Such as: China, Russia, Bolivia, Columbia and Ecuador, Vietnam,...

[Abiky]

Is Bitcoin Legal or Illegal? The answer – it depends on the user's location and activity.
Consumers have a greater ability to purchase goods and services with Bitcoin Although Bitcoin appears at a glance as a well-established electronic money system, there is still no unified international law governing Bitcoin.
Some countries have indirectly adopted the legal use of Bitcoin by enacting some regulatory oversight. Such as: United States, Canada, Australia, Venezuela, European Union, ...
While Bitcoin is welcomed in many parts of the world, some countries are wary of its volatility, decentralization, perceived threat to existing monetary systems and links to other currencies. illegal activities such as drug trafficking and money laundering. Some countries have completely banned digital currencies while others have tried to cut off any support from the banking and financial system necessary for transactions and use. Such as: China, Russia, Bolivia, Columbia and Ecuador, Vietnam,...

Exactly. It all depends on a governments' stance towards Bitcoin. Adopting it as legal tender would only increase Bitcoin's growth within that region. The more popular Bitcoin becomes, the more tempted governments will be in legalizing Bitcoin for their own benefit. After all, they wouldn't want to miss a huge opportunity to profit from crypto taxes. El Salvador became the first country to adopt Bitcoin as legal tender, while others are in the process of doing so (mainly countries in Latin America). Developed countries like the United States and UK are already devising laws in order to legitimize Bitcoin as much as possible. This is good because it takes Bitcoin one step closer towards becoming a global cryptocurrency. Who knows if Bitcoin manages to replace Fiat sometime in the future? Just my thoughts

[sgenuine]

I see that countries mostly with weak economy are adopting Bitcoin now as their national currency is subject to hyperinflation while Bitcoin seems to be more secure. As for developed countries, I don't think that they will accept crypto as a national currency in the nearest future as authorities certainly don't want to lose control over finances.

[wxa7115]

Someone pointed out that superpower countries are going to be the ones that are not going to accept it. Take China for example, with the way they are going do you think that they will ever want to adopt Bitcoin as a legal tender? I don’t think so.

Most of these big countries are not going to do that, you should also imagine England choosing bitcoin over their pounds sterling, and the United States choosing it over the United States Dollar, how possible could that be? If you look at all these things you would see that it’s really not going to work as you think. That El Salvador did it doesn’t mean that others are also going to do the same thing.

Recognizing bitcoin as a legal tender is not really choosing between fiat or bitcoin, governments could still print their fiat and make bitcoin legal tender alongside it, however even this scenario is unlikely under normal circumstances.

So when this could happen? When circumstances are anything but normal, right now governments are recognizing inflation is high but they are assuring their population that this is temporal, but what if it is not? At some point people will realize how much purchasing power they are losing and they will look for ways to keep it, and bitcoin will be there for them, bitcoin will become a de facto legal tender, and after some time the government will have no other option but to recognize this on the law.