Rules and regulations about crypto found around the world.
Cryptocurrency is growing in popularity, but what does that mean? As investors and fintech enthusiasts explore the world of digital money, laws are beginning to catch up. Every country is handling it differently in terms of taxes and, thus, are creating different laws about ICOs, trading, and more.
What is Cryptocurrency?
The history of cryptocurrency begins with Bitcoin in 2008 and, as of 2015, there were 14.6 million bitcoins in circulation. Since its launch, cryptocurrency has found its way into many aspects of our everyday lives that we may not even be aware of. There are now several different kinds of cryptocurrencies. Cryptocurrency has the ability to make transferring funds easier between two parties. The transactions don’t cost much and allow users to avoid high fees experienced when using most banks and wire transfers.
Cryptocurrency is digital money that uses cryptography for security. Cryptography is writing and solving puzzles. With the cryptography step, it is difficult to counterfeit. The currency does not have a central authority and can be used for a variety of things such as buying goods and investing.
With the popularity of cryptocurrency on the rise, many nations have been encouraged to create regulations surrounding digital currency. 2017 was coined as the year of ICO, which has led many to believe 2018 to be the year of regulations. Below are some of the crypto regulations found around the world
Switzerland has always had a progressive viewpoint on individual banking and privacy, and this holds true with cryptocurrency regulation – with an open attitude towards digital money. Economics Minister, Johann Schneider-Ammann, stated in January of 2018 that he would like to see Switzerland as “the crypto-nation.”
Swiss officials want to see the ICO market prosper while also keeping up the standards and integrity of the financial markets. There is an ICO working group that is working to increase the legal certainty, protect existing financial centers, and ensure tech-neutral regulation.
Previously the regulations on cryptocurrency have varied from state to state, mostly adding laws about cryptocurrency and state tax and exchanges are legal depending on the state in question. As a whole, however, there are no set cryptocurrency regulations in the United States.
According to the Financial Crimes Enforcement Network, bitcoin is not a legal tender. This was backed up by FinCen, a group within the Treasury Department in 2013 saying virtual currency does not have legal tender status. The IRS classifies cryptocurrency as property and taxes it as such.
After a scandal around the Commonwealth Bank of Australia in 2017, the government worked to strengthen anti-money laundering laws and digital currency regulations. This was a change from the country’s previous stance of being “hands-off” when it comes to cryptocurrency.
The future of crypto regulations is unclear. As of today, specific regulations don’t exist and have had a negative impact on the country. There is a mixed consensus in the government of supporters and those opposed to regulating the currency making the future uncertain.
China has taken efforts to get serious about crypto-regulations. First, ICOs have been banned and cryptocurrency exchanges have been frozen. Bitcoin mining is no longer allowed and cryptocurrency or any internet activity surrounding crypto has been banned.
This country seems to have some of the strictest laws surrounding digital money. These actions have been taken because the People’s Republic of China is focused on creating capital outflows and eliminating corruption.
With China being one of the strictest nations surrounding crypto, South Korea was believed to be the haven for those looking to engage with digital money. Unfortunately, this changed early in 2018. Since then, South Korean officials have banned anonymous accounts from trading cryptocurrencies. On January 30, 2018, there was a marketwide sell-off.
As of April 2017, Bitcoin is considered a legal tender in the country of Japan. In fact, this is the biggest market for the famous digital currency, and nearly half of Bitcoin’s daily volume is traded in Japanese currency.
In Japan, exchanges are legal if registered with the Japanese Financial Services Agency.
Both the United Kingdom and European Union plan to go forward with their regulations, even post Brexit. According to The Guardian, both have plans to erase the anonymity of cryptocurrency traders in order to lower money laundering and tax evasion.
There is so much buzz around crypto and so much to learn. For more information about cryptocurrency, read our introduction to cryptocurrency page. We also have a cryptocurrency vocabulary list where you can learn all of the words associated with cryptocurrency. Once you get involved with digital money, you will also need to know how to stay tax compliant. For this, we have gathered some tax laws from around the world regarding cryptocurrency.
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