Over the time I’ve posted articles about Bitcoin, we’ve been on a rollercoaster ride in price action! Near the end of 2017 saw it reaching around USD20,000 only to plummet to around USD10,000 recently. For those of you not used to this ride, welcome to the Wild West Life of Cryptocurrency! In seriousness, though, there’s an issue for people who are not just looking at price but also practicality in using Bitcoin. By using, I mean for paying for stuff. Which brings to question: Is Bitcoin Legal in Brunei?
I briefly touched on the legality of Bitcoin in the post about selling your Bitcoin and soon after, we received words from our monetary authority. Authoriti Monetari Brunei Darussalam or AMBD issued a press release advising the general public to be highly cautious. And why wouldn’t they? People are jumping on this bubble bandwagon and tulipmania!
Is Bitcoin Legal in Brunei? – Legal Tender
AMBD put their foot down immediately at the beginning of the press release. They tell us that cryptocurrencies are not legal tender in Brunei and are therefore not regulated by AMBD. The latter is obvious because Bitcoin was made to be decentralised and therefore harder for any one body to regulate. It’s the former that clarifies Brunei’s stance for now. But first we need to know:
What is legal tender?
It is any officially recognised medium that can be used for commercial exchange and payment of debt. The money that we know and use so far are legal tender. The country’s government issues them and therefore recognises them! In a nutshell, you can pay for stuff such as bills, goods, services with a currency that’s legal tender.
So what does that mean for cryptocurrency?
The main point of using Bitcoin as a mode of payment is to adopt it into mainstream spending. However, not legal tender means that payment in Bitcoins are basically not recognised as well.
Let’s imagine a scenario: Sam buys a car from John for $10,000. Sam pays 1 Bitcoin (imagine the price was 1 BTC = $10,000) to Sam’s wallet. From the blockchain, we can see that the transfer indeed did occur. But as far as the law is concerned, Sam might as well have given John shiny, coloured pebbles! So legally, Sam still owes $10,000!
I hope that makes sense but long story short, don’t try to dispute transactions using cryptocurrency in Brunei. You’ll likely be required to pay additional cash!
The rest of AMBD’s press release talks about the risks of cryptocurrency, particularly:
- Anonymous nature of cryptocurrency
- Trading platforms sitting in places beyond Brunei’s jurisdictions
- Susceptibility to be used for illegal activities
- Theft as a result of hacks and fraud
- Speculative price action and high risk of value loss
- No regulatory protection for investors
They also remind the public to conduct proper due diligence and be vigilant when dealing with investments and financial products.
Owning, Buying and Selling Bitcoin
I noticed in the press release that there’s no mention about simply owning Bitcoins. I personally infer this as them saying “We’ve warned you; if you get burned, we told you so!” Particularly in the last few paragraphs. I also respect their decision for keeping an open mind about this and not jump the gun on banning Bitcoin. I’m pretty sure they see the challenges they face in trying to regulate some kind of magic internet money.
So is Bitcoin legal in Brunei in terms of personal use? I’d still say it’s not illegal to be safe. But the law doesn’t stop you from trading cryptocurrency though. Speculative investors are expected to do their proper research and if they ignore that and buy the latest altcoin to be shilled, that’s their prerogative!
AMBD has informed the public that Bitcoins and other cryptocurrencies are not legal tender. That means if you were to pay using cryptocurrency, legally you’d still be owing money. And if the seller was nasty and pursued you for “double” payout, you’d be on the short end of the stick.
It’s not illegal to trade, own and dabble in crypto though. But if you do, as always, do your homework or you’ll have a high chance of getting burned!
Laws are like sausages, it is better not to see them being made.
– Otto von Bismarck