Cryptocurrency has officially become a "means of mutual settlement" in Europe.
The German Ministry of Finance decided to recognize Bitcoin as a "unit of financial accounting". Thus, the most popular cryptocurrency has become one of the varieties of money in a leading economy of Europe.
Bitcoin, the most famous in the world cryptocurrency, established in year 2009, become very popular in recent years, is now officially recognized as one of the means of calculating and accounting in Germany, reports the Frankfurter Allgemeine. The Ministry of Finance issued a decision according to which Bitcoin is legally recognized as a "means of mutual settlement". Thus, a payment system that existed only on the Internet, nowadays stands in a row with Dollar and Euro – the main currency instruments of global economy.
Currently Germany allows the use of Bitcoin without persecution only for private transactions. Any commercial activity related to cryptocurrency will require a separate authorization from German financial regulators.
How did the crypto currency get its popularity?
The problem of rapid development and growth in recent years of virtual currencies has reached a global level - the World Bank, the US Treasury, discusses it. Experts agree that due to global economic problems and financial crises, people are increasingly trying to save money by turning to virtual cryptocurrencies since existing banking system showed their weaknesses worldwide ...
Current situation is contradictory - Bitcoin system does not have bank accounts as such, just as there is no single bank issuing the currency. It is a decentralized concept where there is no institution or authority capable of applying sanctions of persecution on an beneficiary of the service. Users of the system create a virtual coin, which automatically comes into their account (wallet). In this case, all records are anonymous and created for only one transaction, after which it becomes unavailable or even self-destroy. To calculate who participated in particular transaction gets almost impossible. The reason for taking Bitcoins as a "means of mutual settlement" was their increased popularity in Germany. The Germans have been actively using virtual currency for more than a year, but at the same time, people avoided 25% of income tax when making transactions using blockchain wallets. Therefore, following the recognition of Bitcoin, the Ministry of Finance intends to bring the tax legislation to a new unit of account, so that mutual settlements using Bitcoins should be also taxed. It is unclear how Germany is goanna implement this yet, given the nature of cryptocurrency itself.