Cryptocurrencies are no longer just a curiosity for tech enthusiasts—they’re becoming a real option at checkout counters, in online shops, and even for tax payments. But the ability to accept crypto varies greatly depending on where your business operates. Below is a practical, merchant-focused look at the regulatory landscape for crypto payments in Europe, the United States, and the rest of the world.
European Union: Regulated but Open for Business
The EU doesn’t consider Bitcoin or other crypto assets as legal tender—no shop is forced to take them—but merchants are free to accept them by mutual agreement. The regulatory landscape is becoming clearer with the EU’s Markets in Crypto-Assets Regulation (MiCA).
Stablecoin Rules (June 2024): MiCA introduced strict oversight for stablecoin issuers (known as asset-referenced and e-money tokens). Issuers must maintain adequate reserves and meet transparency requirements. For merchants, this means that stablecoins accepted at checkout are becoming safer and less volatile.
Crypto-Asset Service Providers (December 2024): Payment processors and exchanges that help you accept crypto will need authorisation under MiCA. When choosing a provider, you’ll want one that’s MiCA-compliant to avoid legal headaches.
AML and Travel Rule Compliance: The Transfer of Funds Regulation (2023/1113) extends the traditional banking “travel rule” to crypto. Even small payments may require the transmission of customer identity data. If you’re using a third-party processor, this is usually handled for you—but you should still understand what data you’re collecting.
Taxation: The Hedqvist ruling by the Court of Justice of the EU clarified that exchanging crypto for fiat is VAT-exempt. However, if you sell products or services for crypto, VAT is calculated as if you sold them for fiat, based on the value of the crypto at the time of sale. For accounting purposes, you’ll want accurate exchange-rate data at the moment of the transaction.
These changes make crypto payments more secure and less of a legal gray area. Many European fashion, tech, and hospitality brands are already adding Bitcoin or stablecoin checkout options—often via payment processors that instantly convert crypto into euros to avoid price volatility.
United States: Property, Not Legal Tender—But Growing Adoption
In the United States, crypto is also not legal tender, but private parties can choose to settle in Bitcoin or stablecoins.
Tax Treatment: The IRS classifies crypto as property, not currency. This means merchants must record the USD fair-market value at the time of each sale as income. If you hold the crypto and its value changes, you could also face capital gains or losses when converting.
Licensing Requirements: Many payment processors must register as money service businesses (MSBs) with FinCEN, comply with Bank Secrecy Act requirements, and in some states—like New York—obtain a BitLicense. Merchants themselves usually don’t need special licenses unless they custody customer funds directly.
Sanctions & AML Obligations: The U.S. Office of Foreign Assets Control (OFAC) expects merchants and processors to screen crypto transactions against sanctions lists. Most third-party processors handle this automatically, but compliance is ultimately your responsibility.
Commercial Law Updates: Several states have adopted Uniform Commercial Code Article 12, which clarifies the treatment of “controllable electronic records” like crypto, making it easier for businesses to use crypto in secured transactions or financing.
Real-World Adoption: Colorado now accepts crypto for state tax payments, using PayPal’s crypto hub as a processor. Major retailers like AMC Theatres and select Shopify merchants already offer crypto payment options, often with automatic fiat conversion to simplify accounting.
For U.S.-based businesses, the key takeaway is: accepting crypto is legal, but you must treat it like any other property transaction for tax purposes and stay mindful of AML compliance if you process payments yourself.
Rest of the World: A Patchwork of Policies
Outside the EU and US, crypto payments are handled in widely different ways:
United Kingdom: Merchants may accept crypto, and the government is developing a regulatory framework for fiat-backed stablecoins to be used in payments. VAT applies normally on sales, even if customers pay with Bitcoin.
Switzerland: One of the most crypto-friendly jurisdictions. The canton of Zug, known as “Crypto Valley,” allows some taxes to be paid in Bitcoin. For VAT, selling products for crypto is treated just like fiat transactions.
Japan: Licensed intermediaries under the Payment Services Act can process crypto payments. The country has a mature regulatory regime, making it one of the safer places for crypto commerce.
Singapore: The Monetary Authority of Singapore (MAS) finalised a stablecoin framework covering tokens pegged to SGD or G10 currencies. Crypto payments via licensed providers are legal and encouraged.
Hong Kong: Building a comprehensive licensing regime for fiat-referenced stablecoins (expected in 2025), as part of its plan to become a regional hub for crypto payments.
United Arab Emirates (Dubai): The Virtual Assets Regulatory Authority (VARA) regulates crypto marketing and payments. Dubai has positioned itself as a crypto hotspot, and businesses such as real estate firms have successfully integrated Bitcoin payments.
Brazil: Law 14,478/2022 places crypto service providers under the Central Bank’s oversight, allowing merchants to accept payments via regulated Virtual Asset Service Providers (VASPs).
India: Crypto is not legal tender. While trading is legal, high taxes (30% on gains and a 1% TDS on transfers) make everyday payments rare.
China (Mainland): All crypto transactions, including payments, remain banned. Merchants cannot accept crypto in any form. (Note: Hong Kong operates under a separate system.)
El Salvador: Bitcoin remains legal tender, though enforcement has softened. Many small merchants still price goods in USD and convert Bitcoin at the point of sale.
Australia & Canada: Merchants can freely accept crypto. VAT/GST rules generally apply to the value of the goods or services sold, while the exchange of crypto to fiat may be exempt from GST/HST.
Merchant Checklist for 2025
Choose a regulated payment processor in your jurisdiction—this reduces your compliance burden.
Invoice in fiat and record the crypto’s fair-market value at the time of sale for tax reporting.
Ensure AML/KYC and sanctions compliance, even if your payment partner automates most of it.
Prefer regulated stablecoins where possible—they offer price stability and clearer legal protections.
Monitor local developments, as regulatory frameworks are still evolving—especially for stablecoins and DeFi-based payment systems.
The Bottom Line
Crypto payments are more mature today than ever before. MiCA in Europe and UCC Article 12 in the U.S. are creating clear rules of the road, while governments from Singapore to the UAE are crafting frameworks for stablecoin payments. For forward-thinking merchants, 2025 is the perfect time to integrate crypto checkout options—provided you stay on top of compliance and tax obligations.
By using trusted processors, recording transactions correctly, and understanding your local rules, you can safely meet growing customer demand for crypto payments—and position your brand as part of the financial future.
