Berlin allows Bitcoin as Legal Tender

One of the most important predictions if 2017 was that atleast one major economy in the developed world will give Bitcoin the status of the legal tender. Its close to being a legal tender.

Becoming Legal Tender vs. Legal Bitcoin

The following Wikipedia link shows the status of Bitcoin’s legality across the world. While holding Bitcoin as an asset and exchanging it for fiat currency is legal in many countries, this new  criterion of “legal tender”  removes the intermediary step of conversion to fiat currency for all practical purposes. This means, Bitcoin in itself will be accepted as an alternative to the Euro.

Tax implications

The challenges with this approach might be many folds. For example, how will the government tax the good or service that accepts bitcoin ( will that tax be levied using fiat exchange rate, or, will the taxed be in cryptocurrencies).