Which Countries Accept Ethereum and Which Have a Complete Ban?

The legality of Ethereum and other cryptocurrencies is widely debated all the time. There are various ongoing discussions in countries about whether Ethereum should be legal or not, so it is easy to get confused about their status.

Regulations and legislation surrounding cryptocurrencies are different from one country to another, making it difficult for newbies to navigate through the crypto landscape.

Well, that is where we come in. If you are to successfully trade Ethereum, you must have a comprehensive knowledge of cryptocurrencies’ legality – both on a local and global scale. Let’s walk you through all you need to know.

Countries With Ethereum Under A Ban

Let’s start with the bad news first – there are several countries in the world that simply don’t accept cryptocurrencies. In that line, notable countries that have explicit and total bans on cryptocurrencies include:

• Cameroon
• Kuwait
• Lybia
• The Maldives
• Bahrain
• China
• Qatar
• Tunisia
• Libya
• Lesotho
• Georgia
• Egypt
• Burundi
• Macao
• Guyana
• Zimbabwe
• Vietnam
• Bangladesh
• Nepal
• Lesotho
• Morocco
• Algeria
• Gabon

Countries That Allow Ethereum Usage

Some central authorities around the world have made it possible for users to trade Ethereum and other digital assets. To do that, they have imposed some measures to have better control over the sector – most notably KYC and AML processes which aim to solve the main problems that stand between ETH and its wider adoption.

These countries have undoubtedly seen the potential that comes with a legalized crypto world and they are quick to use their growth potential. Let’s take a look at countries that currently have a more relaxed stance towards Ethereum and other cryptocurrencies.

The United States

First off, we have a great economy in worldwide ranks that supports cryptocurrencies. The US Department of Treasury’s Financial Crimes Enforcement Network has stated that cryptocurrencies are convertible with an equivalent value in fiat currency or any other that can act as a substitute.

The current US laws stipulate that any entity that administers or exchanges cryptocurrencies falls under the Money Services Business category (MSB). As such, it would be subject to the Bank Secrecy Act and must file transactions bigger than $10,000 and must be registered with the US Treasury.

To this day, the US Treasury and the FinCEN craft strategies and assist the government by making legislative processes to further develop the crypto world with various regulations – mainly about crypto tracking and reporting.

The EU

Moving on, we have the EU that recognizes ETH as a crypto-asset. It is not illegal to use any cryptocurrency in the EU, but the European Banking Authority warns users that crypto-assets are outside its control. Therefore, countries and users must be fully aware of the risks that come with ETH trading and storing.

When it comes to the legislation in place, significant development has been made in the past few years:

• 2020 – The European Commission proposed a draft legislation that would regulate cryptocurrencies, which was welcomed by several agencies within the Union.
• 2022 – amendments took place to the legislation, and the final version was sent for voting in the EC.
• 2023 – The European Parliament passed the MiCA Regulation (Markets in Cryptoassets). It is set to be enacted in 2025, and it regulates services connected to digital assets and stablecoins.

Note that the new regulation does not regulate security or NFTs. With it, the European Union hopes that it will level the financial playing field across the EU and ensure that users have access to and safely store cryptocurrencies.

Canada

Up next, Canada is one of the most crypto-friendly countries in the world, just like its southern neighbour – the USA.

Cryptocurrencies are viewed as a commodity in Canada, and the Canada Revenue Agency places them under tax regulations in the country. Any income people make with Ethereum is seen as a business income or capital gain – and you have to report it that way and pay the corresponding taxes.

As for the Crypto Exchanges, Canada views them as money service businesses that fall under the Proceeds of Crime and Terrorist Financing Act. Therefore, all crypto exchanges need to register with the Financial Transactions and Reports Analysis Centre of Canada.

As registered entities, exchange platforms must report suspicious transactions and keep certain records of transactions.

Australia

Australia has similar views as Canada when it comes to cryptocurrencies. The Australian Taxation Office sees Ethereum as a financial asset that has a certain value and as such, is subject to the taxation regime.

If you sell, gift, or buy Ethereum, or use it to buy goods and services, you will need to pay a capital gains tax. In addition, you must keep records of any transactions you make when using Ethereum and other cryptocurrencies for tax purposes.

There is a certain loophole in this situation. If you hold Ethereum strictly for personal use and make gains that way, you may be excluded from taxation in some situations.

El Salvador

El Salvador deserves special mention as one of the first countries in the world that has accepted cryptocurrencies as a legal tender.

The Congress of the country approved a bill back in 2021 that stipulates cryptocurrencies to become a legal form of value exchange. It also allows citizens in El Salvador to purchase goods and services using ETH and other cryptocurrencies.

Israel

Israel is another country open to the use of ETH. There are plenty of crypto ATMs around the country with many businesses in Israel accepting crypto as payment – making the country the hub for crypto transactions.

Nonetheless, note that the Israeli authorities don’t consider cryptocurrencies to be a currency, security or asset, but users must pay 25% in capital gains tax whenever they sell ETH.

Japan

Another big country that is friendly towards the use of cryptocurrencies is Japan. There, Bitcoin is legal, but it is viewed as a form of property that you store on a virtual device, instead of it being a legal tender.

The government issued a decision in 2014 according to which cryptocurrencies are not bonds, nor money, so banks and securities firms cannot use them for transactions.

However, there is no law or legislation in place in Japan that would forbid people or companies from receiving cryptocurrencies for their goods or services. All exchange sites in the country must be registered, so we can safely say that Japan is among the countries that allow ETH trading.

India

Finally, we have India, a country which has had a complex and turbulent history with cryptocurrencies such as ETH.

The government supports blockchain technology in payment systems. Furthermore, the Reserve Bank of India had imposed a ban on crypto trading, but that ban was recently lifted.

What Does The Future Hold?

It is clear that more and more countries have accepted ETH and other cryptocurrencies as a form of payment or allowed users to trade them.

Other notable countries with a friendly crypto approach include Denmark, Germany, the UK, Spain and Switzerland, just to name a few.

It is hard to predict what the future holds for ETH, as different governments have different stances towards them. One thing is sure – long gone are the days when cryptocurrencies could simply be ignored – they are still big players in the decentralized financial world.