The demand for cryptocurrency is increasing day to day; global regulators are divided on how to form the regulations. Most of the virtual currencies are not supported by any central government or authority, which means each country has its own standard of regulations.
An announcement in new regulations from any corner of the world will drastically impact on cryptocurrencies. If you are thinking to create cryptocurrency business, you should consider the regulations which are in line with your crypto business.
We are providing a guide to where digital currencies stand with governments and regulators around the world. Some of the major countries with cryptocurrency regulations are explained below:
European Union [EU]
View on Cryptocurrency: According to European Central Bank, No EU member state can introduce its own currency,
Policy: Legal and depends from country to country
EU leaders have raised concern about money laundering. The cryptocurrency creator and wallet providers should follow the Anti-Money Laundering Directive. The commission will continue to watch these markets together with other stakeholders, at the European Union and international level, including G-20 nations.
United States of America [U.S.A]
View on Cryptocurrency: As per Financial Crimes Enforcement Network (FinCEN) cryptos are not legal tender.
Policy: Cryptocurrencies are Legal and it depends on the policies of respective states (U.S)
U.S. regulators vary in their definitions of bitcoin and other cryptocurrencies. FinCEN, a bureau of the Treasury Department, in 2013 stated that cryptocurrency does not have legal tender status in any jurisdiction.
The Securities and Exchange Commission (SEC) has intimated its views on cryptocurrency as security. Earlier in March 2018, the agency extended its scrutiny and said it is examining to apply the securities laws to everything from cryptocurrency exchanges to digital asset storage firms known as wallets.
The agency has focused on ICOs (initial coin offerings), or crypto coins released through fundraisers known as token sales, and has risen its efforts to police them through recent subpoenas.
The Commodity Futures Trading Commission states that bitcoin is a commodity (property). The IRS says cryptocurrencies are not actually a currency. It also defined cryptocurrency in 2014 as an asset and issued guidance on how it should be taxed.
Also read, What’s So Different About Cryptocurrency Exchanges?
View on Cryptocurrency: Cryptocurrency is a Legal tender, depending on the countries.
Policy: No global regulatory present at the moment.
The global watchdog Financial Stability Board, which runs financial regulations for G-20 nations economies, took a cautious temper in answering calls from some countries to crack down on cryptocurrencies.
The International Monetary Fund (IMF) has also called for more assistance. IMF Managing Director Christine Lagarde highlighted cryptocurrency’s capability as a means for money laundering and the funding of terrorism.
View on Cryptocurrency: It is not a legal tender.
Policy: Cryptocurrencies are Illegal.
Trading bitcoin or any other cryptocurrencies in China is technically illegal.
In 2017, the Chinese government banned the ICOs a means for start-ups to raise capitals by selling new cryptocurrencies and also shut down domestic cryptocurrency exchanges.
In January 2018, a senior Chinese central banker said the government authorities should ban trading of cryptocurrencies as well as people and businesses that provide crypto related services.
But activity in crypto business is carried on by alternative ways like mining. Chinese authorities are seeking to end this practice.
View on Cryptocurrency: It is not a legal tender.
Policy: Cryptos are legal, but the use of unidentified bank accounts for crypto coin trading is outlawed. You have to register with South Korea’s Financial Services Commission.
Financial authorities, in 2013 said that bitcoin and other cryptocurrencies are not legal currencies.
In January 2018, South Korea’s justice minister said that the government was thinking to close of cryptocurrency exchanges. An appeal asking the government to think back on biased regulation got 280,000 signatures following the decision. The Korean government replied by saying it will take strong action against illegitimate and criminal acts in cryptocurrency trading.
The Korean government has declared that it will not ban crypto exchanges, initial coin offerings and futures but will remain under examination.
Also read, The Difference Between A Cryptocurrency Speculator And A True Bitcoin Believer
View on Cryptocurrency: Legal tender as of last April.
Policy: Exchanges are legal if they are registered with the Japanese Financial Services Agency.
Japan is the largest market for the cryptocurrency. Almost half of the cryptocurrency’s daily volume is traded in Japan.
Last year, Japanese agency issued a notice to Binance for operating in the country without a license. Frequent Hacks have been a major concern in Japan. It was the first nation to adopt a national system to regulate cryptocurrency trading after its exchanges were subjected to some well-known hacks including Mt.Gox.
We think the article has provided enough information about cryptocurrency regulations in some of the major countries. If you are considering creating cryptocurrency industry, this article helps you in going through the rules and regulations of countries, financial authorities, banks etc.