Many people around the world use cryptocurrencies to handle their finances without having to rely on the country’s fiat money. This is because cryptocurrencies are decentralized and allow for anonymity. For this reason, many countries and organizations have been working towards regulating crypto in different ways.
In this blog post, we will be looking at what countries regulate crypto and how they go about it. We will also talk about places where crypto was banned entirely and why people were against it in those locations. Finally, we will delve into how some governments such as Chile are adopting crypto into their economic system despite these risks of fraud or hacking that come with using them as an alternative form of currency now that they’re becoming more mainstream.
Regulation by Country
According to coinmarketcap, the current top 5 cryptocurrencies in terms of market capitalization are bitcoin core (BTC) at 64.8 billion USD, ethereum (ETH) at 34.1 billion USD, Ripple (XRP) at 8.4 billion USD, bitcoin cash (BCH) with 7.5 billion USD and litecoin at 5.3 billion USD. After scratching the surface of countries that regulate crypto, it’s clear that this is a global phenomenon that needs a coordinated effort to regulate across borders and continents so that no single country can dominate the cryptocurrency market and exert control over them.
Though there may be some differences in how countries approach crypto regulation from a governmental perspective, there are also some similarities, the legal status of a decentralized currency that’s not legally issued by any government and an alternative to fiat money or other currencies. On the other hand, countries may differ in viewing crypto as money or assets and deciding on their taxes accordingly.
In recent years, the European Union has been leading the way in regulation with the first EU-wide anti-money laundering directive (AMLD5) adopted on 5th January 2018. In this regard, the EU and its member states have taken numerous measures to reduce the risks related to cryptocurrencies, including preventing their use in terrorist activities or funding criminal organizations.
The US is another country that has taken a leading role in regulating crypto by imposing taxes on them. Recently, the US Congress held a hearing on digital currencies and ICOs where they brought together both supporters of crypto and critics. The hearing revolved around discussing whether the US government should do more to protect investors from fraudulent ICOs and consider offering certain types of crypto-related technologies with different regulations.
The UK government also showed interest in regulating cryptocurrencies, starting with consultations launched by Her Majesty’s Treasury (HM Treasury).
Crypto-Currencies are one of the most significant technological resources to come out of the Internet age. Stemming from Blockchain technology, they are decentralized, encrypted currencies that operate without a central bank or geographical restrictions. Because of these characteristics, many countries have begun regulating this new currency type even before they implement it into their markets.
This post will explore what regulation around cryptocurrencies is like now and how it has changed over time per country and what is on the horizon for regulation in this space. We will also discuss some critical developments in cryptocurrency regulations that may help standardize these digital assets among evolving markets worldwide.
WHAT IS CRYPTOCURRENCY REGULATION?
Cryptocurrency Regulation is the set of laws, customs, and practices that govern crypto-currencies use, circulation, and protection. In addition to this, they also help determine how national governments tax cryptocurrencies. This regulation varies widely depending on the country. Some countries have taken a more hands-off approach to the industry, while others have placed strict regulations. Some countries even went so far as to ban outright digital currencies for various reasons listed below:
China: China decided to ban Crypto-Currencies entirely in 2017 due to concerns with taxation and anti-social behavior related to digital currencies.
China decided to ban Crypto-Currencies entirely in 2017 due to concerns with taxation and anti-social behavior related to digital currencies. Venezuela – The Venezuelan government, banned all crypto transactions outside their control.
The Venezuelan government banned all crypto transactions for being outside their control. Iran – The Iranian government banned all Crypto transactions within its borders due to the nature of cryptocurrencies being “un-Islamic.” This ban was enforced by disconnecting the country from the rest of the web to prevent citizens from trading within its borders.
The Iranian government banned all Crypto transactions within its borders due to the nature of cryptocurrencies being “un-Islamic.” This ban was enforced by disconnecting the country from the rest of the web to prevent citizens from trading within its borders. Bolivia – Bolivia banned Crypto-currencies partially due to concerns that they are used for illegal transactions such as money-laundering and tax evaporation.
Some people are not sure what the government is concerned with regarding cryptocurrencies. There is still a lot of confusion about what exactly cryptocurrencies are and how they should be handled in general. This article looks at the current concerns that the government has with crypto and provides an answer about why crypto exists in its current state.
What are the Government’s Concerns With Cryptocurrencies?
Cryptocurrencies have been used to purchase illegal goods and services. They have significantly influenced money laundering since they can be used without leaving any traceable information. They are also tough to track by government agencies, which makes it easy for criminals to steal money under the radar. If a criminal were to use regular currency, the transaction would leave a record that could easily be traced back to them if something were ever to go wrong. Due to these reasons, governments in certain countries have deemed cryptocurrencies illegal in their respective countries.
Although the United States has not yet made any decisions on whether or not they are illegal, they have taken other steps to prevent certain crimes. For example, in 2011, the US government claimed that it was unlawful for banks and other financial institutions to partner with any cryptocurrency exchanges. This means that even though cryptocurrencies are not necessarily illegal inside the country, they can’t be traded through banks or other money-handling businesses. However, the government does claim that cryptocurrencies can be used to invest in an exchange and pay for goods or services from an exchange company.