Bitcoin in the Eyes of Regulators: Store of Value, Not Currency

[arzuo]

Regulators increasingly treat Bitcoin more like digital gold or property than a traditional currency. This view suggests that BTC may fall under regulations similar to those applied to commodities rather than national currencies.

As a result, Bitcoin is often taxed based on capital gains instead of being treated as a medium of exchange. This perspective can also influence how investors view Bitcoin, increasing its appeal as a long-term investment asset. Most regulators today see Bitcoin primarily as a store of value and a speculative investment, rather than legal tender. In many countries, it is classified more like a commodity or property and is subject to investment regulations, anti-money-laundering rules, and tax requirements, rather than monetary policy controls. Individual investors may need to adjust their strategies accordingly, including reporting capital gains and understanding tax  obligations related to holding or selling BTC.

Viewing  Bitcoin as a commodity also means it may face stricter regulatory oversight, similar to assets such as gold or oil. While this can increase compliance requirements for exchanges and investors, it also promotes transparency and reduces the risk of fraud. Over time, a clearer regulatory framework may encourage greater institutional participation, providing more stability and confidence in the market. Rather than limiting Bitcoin, this regulatory approach reflects growing acceptance of its role as a new and evolving financial asset that does not fit neatly into traditional categories.

[Luzin]

Rather than limiting Bitcoin, this regulatory approach reflects growing acceptance of its role as a new and evolving financial asset that does not fit neatly into traditional categories.

Yes, the industry is developing that way. This situation has strayed far from the ideals and vision of Satoshi Nakamoto. But interestingly, Bitcoin is increasingly being accepted and growing. It seems that this change is adapting to regulatory conditions, which indeed conflict with the principle of centralized systems of government. Looking at this situation, I think adjustment is the most beneficial, which is why governments of each country are starting to regulate this issue. They impose taxes to increase state revenue. They do not ban it because it is profitable. This situation is already very advantageous for us because it is not prohibited. We can still benefit from the regulations, so I still feel that this situation is good.

[hero_the_bossman]

As of now, they just adjust their own systems to BTC, but I hope it will change soon enough that BTC would be viewed differently, allowing people to have it as a true alternative to fiat, not only for the hoarding.

[Furball808]

Regulators increasingly treat Bitcoin more like digital gold or property than a traditional currency. This view suggests that BTC may fall under regulations similar to those applied to commodities rather than national currencies.

Countries won't recognize bitcoin as a legal currency because they do not want to give that much freedom to their citizens. They can't control bitcoin if it was considered as a legal currency. But just like how they can't control bitcoin, they can't fully prevent their citizens from using the currency

Viewing   Bitcoin as a commodity also means it may face stricter regulatory oversight, similar to assets such as gold or oil. While this can increase compliance requirements for exchanges and investors, it also promotes transparency and reduces the risk of fraud. Over time, a clearer regulatory framework may encourage greater institutional participation, providing more stability and confidence in the market. Rather than limiting Bitcoin, this regulatory approach reflects growing acceptance of its role as a new and evolving financial asset that does not fit neatly into traditional categories.

In the past few years, bitcoin is still trying to break into mainstream level so there was a point that countries not banning bitcoin in itself was considered as a win already. There might be a debate whether it is better that a country makes bitcoin legal but considered as an asset or implement a ban on it and make it unusable in the country.

[Alpha Marine]

Whichever regulatory body takes jurisdiction of Bitcoin, stricter regulations will surely come, and however Bitcoin is viewed, either as a commodity, speculative asset or currency, taxes and regulations will also be there.
If you hold a foreign currency and sell at a profit because the currency increased in value, you are obliged to pay capital gains tax on that profit. So even if Bitcoin was viewed as a currency by regulators, if your country pays capital gains tax, then you're supposed to pay, except there is an exception for crypto gains. 

The way Bitcoin is viewed does not matter when taxes and regulations are concerned. There may be a difference in regulation from different regulatory bodies, but what is certain is that the stricter regulations will come from all or any of them that have jurisdiction.
For something that can be classified as a financial asset, commodity and currency, the regulatory bodies are never going to leave it alone.

[sleepfirefly]

the developing countries may be the ones more likely to accept bitcoin as a currency because of how weak their local currencies are. example of this would be el salvador and central african republic. i am sure more developing countries and their citizens will see the value of using bitcoin as a legal tender

[joniboini]

I feel like this isn't new. I'm sure most people can tell this is the direction most governments would have chosen years ago. I remember seeing similar discussions in the 2020s about crypto and banks. At the very least, I feel that way about my local market.

Governments haven't really limited them from doing anything for years, and they just made regulations about exchanges and crypto clearer in the last 3 years or so. I doubt they'll change their stance on using crypto to pay for stuff anytime soon, if ever.

[betswift]

the developing countries may be the ones more likely to accept bitcoin as a currency because of how weak their local currencies are. example of this would be el salvador and central african republic. i am sure more developing countries and their citizens will see the value of using bitcoin as a legal tender

They may, but they would be still tight on IMF dotations and so on.

Big countries are more likely to use the BTCs potential on their own terms because they have no chains to them.