On Monday, Germany’s finance ministry brought Bitcoin one step closer to legitimacy by declaring it a “unit of account,” thus allowing it to be used as legal currency for tax and trading purposes. Supporter and parliament member Frank Schaeffler says that classifying the virtual currency under the country’s banking rules represents “a first step” towards denationalizing the production of money, and hopes that the government doesn’t interfere with its success: “A free country should…not intervene in citizens’ private choice of money.”
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What’s the Big Idea?
As Bitcoin continues to grow in popularity, it’s been attracting increased attention from government and financial institutions. The Thai government banned the currency last month, and in the US, both the FBI and the Department of Homeland Security are investigating it. Germany’s ruling opens the way for officials to collect tax on commercial profits made through Bitcoin transactions, which FOREX.com research director Katherine Brooks says is “a good example of German forward-thinking…[Bitcoin] could become an alternative to the euro if the single currency ever ceased to exist.”