The story of the German Finance Ministry stating essentially Bitcoin is “legal tender” has been making the rounds all over the virtual currency and technology world. The German government recognizes the digital currency as a “unit of account” that can be used in Germany. This makes them a kind of “private money”, which can be used in multilateral clearing circles.The German Ministry of Finance has issued an official statement recognizing Bitcoin as “Rechnungseinheiten,” a legal designation that translates to “units of account”. This type of money is also referred to as “artificial currency” or “side payments.”“We should have competition in the production of money. I have long been a proponent of Friedrich August von Hayek scheme to denationalize money. Bitcoins are a first step in this direction,” said Frank Schaeffler, a member of the German parliament’s Finance Committee, who has pushed for legal classification of bitcoins.This is a very, very big deal. Not just because some bureaucrat seemingly “legitimizes” the crypto-currency, it is also the first commonsense approach from a major economy to-date. While the U.S. government specifically the New York Department Of Financial Services and the US Senate are putting in place appropriate regulatory safeguards for virtual currencies, Germany is merely accepting the obvious.The USA is not the only country to scrutinize Bitcoin operation; Thailand has also decided that Bitcoin is not a type of currency. Senior members of the Foreign Exchange Administration and Policy Department of Thailand advised that due to lack of existing applicable laws, capital controls and the fact that Bitcoin straddles multiple financial facets, Thai officials believe that Bitcoin transactions must therefore be illegal in Thailand.A positive step?Germany has gone ahead and given legal status to the Bitcoin, as it could become an alternative to the euro if the single currency ever ceased to exist. Schaeffler said “If the euro does go belly up the German authorities could potentially still collect tax if everyone started using the bitcoin” – that’s a good example of German forward-thinking!