Crypto is nothing new, but the remarkable rate of adoption has made it the talk of the town. The crypto industry has come a long way since the introduction of Bitcoin in 2009 by Satoshi Nakamoto. As of now, the total market cap of the cryptocurrency market stands at over $1 Trillion. This kind of volume has urged governments around the world to create their own set of frameworks to regulate cryptocurrencies. Bear with us as we present you with a brief overview of crypto regulations from around the world.
Before we do that, there’s another thing that needs your attention. If you’re into cryptocurrencies, you’ll agree that it’s at the start of a bear or bull market when you need the latest information the most. Any delay can result in losses or missed opportunities. Make sure your internet is top-tier so you don’t miss a thing. For this, consider upgrading to one of the ATT Internet Plans because of its high reliability and multiple speed options, and you can pick one that fits your needs best. With that said, here is a breakdown of the notable crypto regulations from around the world. Let’s get into it.
USA
In the past few years, some departments in the US have issued various regulations related to crypto. However, the crypto space remains largely unregulated in the US. It doesn’t stop there. The actual regulatory environment is hostile to crypto. For example, the Securities and Exchange Commission (SEC) filed a lawsuit against Ripple Labs, stating that their sale of the XRP token was unauthorized and that it actually was a security, and not a commodity, which entailed getting permission from the SEC first. But the Ripple Labs didn’t, according to the lawsuit.
The case is still ongoing, but the summary judgment was issued back in July, which clarified that XRP didn’t qualify as a security and that the sale of the XRP tokens was completely legitimate. The SEC has since appealed the decision and awaits further proceedings.
After losing this battle, the SEC has gone on a crusade to get authority over various cryptocurrencies, which has no legal grounds. How can you penalize or exonerate entities and commodities for which no laws existed before? This has forced some notable players in the cryptocurrency space in the US to move their operations outside of the US. Gemini, one of the leading crypto exchanges, is one such example of entities that moved their headquarters to the UK, because of the regulatory clarity.
Regulatory developments
This case drew the attention of the Congress and public alike and urged lawmakers to obtain regulatory clarity on cryptocurrencies. The Biden administration has released a new framework to regulate digital currencies and create their own central bank digital currency (CBDC), which is essentially a digital form of the US dollar, controlled by the government. Admittedly, this undermines the true spirit of crypto – a currency that’s not controlled by any centralized authority like a government so that it can’t be manipulated, but at least it’s a first step in the right direction.
China
China has completely banned all cryptocurrencies citing the reason that the issuing entities didn’t obtain permission from The People’s Bank of China (PBOC). This happened in 2021, but crypto was booming before this. In addition to cryptocurrency trading, several groups used to mine Bitcoin and other cryptocurrencies because of favorable economic situations.
Currently, China is working on a digital Yuan (e-CNY) and is in the testing phase of its central bank digital currency (CBDC).
India
India hasn’t yet decided on what to do with cryptocurrencies, and they remain unregulated. A bill to ban private cryptocurrencies is currently circulating but it hasn’t been passed into the law yet. As of now, there is a 30% tax on all crypto investments and an additional 1% on TDS in crypto trades.
United Kingdom
The UK is one of the leading countries in terms of devising new crypto regulations. The derivatives trade is banned, but you can purchase and sell cryptocurrencies on your own. It’s not considered a legal tender but is a property or commodity instead. All entities engaged in selling cryptocurrencies to the public must be registered with the Financial Conduct Authority (FCA) first and implement anti-money laundering steps like Know Your Client (KYC) regulations. Moreover, there is a capital gains tax on crypto if you live in the UK.
Japan
Japan is also one of the progressive countries when it comes to crypto and has taken proactive measures to regulate this space. The Financial Services Agency (FSA) oversees and regulates the crypto trade in Japan and fully complies with AML/CFT regulations.
United Arab Emirates
While there is no dedicated crypto law in the UAE, several regulations related to crypto are in place to supervise and control the crypto trade. The Financial Services Regulatory Authority (FSRA) has issued the Regulation of Crypto Asset Activities in ADGM, which is a detailed guide on everything surrounding cryptocurrencies. The UAE is doing this in hopes of becoming the next financial hub of the world and establishing regional hegemony.
Since there is no income tax in UAE, the crypto gains are also exempt from capital gains tax and other trading taxes, which has made the UAE one of the biggest cryptocurrency hubs in the world.
Conclusion
This is how some of the notable countries in the world are navigating cryptocurrencies. Financial irregularities like money laundering and terrorism funding are some of the biggest challenges the crypto market faces as there are limited ways for governments to verify if the transactions are originating from a legitimate source or not. The regulatory fog around cryptocurrencies won’t disperse until the entities controlling these cryptocurrencies make proactive efforts to combat these challenges.
