With the rapid growth of blockchain technology and cryptocurrencies among people worldwide, many countries are also struggling to keep up with the new technology and facing issues. For example, in June 2018, a cyberattack on a cryptocurrency exchange company called Coinrail caused investors to lose about USD 40 million worth of digital currencies. As a result, to save the economy, governments worldwide have started passing basic frameworks for the regulation of cryptocurrencies. This article will discuss the current state of cryptocurrency regulations worldwide and how they affect investors.
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The United States
The U.S. government is currently trying to determine whether it should regulate cryptocurrencies and other digital assets as securities or commodities or not. The Commodity Futures Trading Commission (CFTC) has been issuing subpoenas and making arrests for alleged fraud in initial coin offerings (ICOs). Also, SEC, to be precise, the Securities and Exchange Commission has announced plans to implement regulations on companies offering ICOs.
In January 2018, the Financial Action Task Force (FATF) issued a report on virtual currencies that calls for greater regulation worldwide, including anti-money-laundering measures, Know Your Customer (KYC) requirements, and restrictions on trading during periods of market volatility.
This is one of the few countries that have not taken any major action against cryptocurrencies except a few. It has declared some guidelines to companies as well as some crypto users regarding their tax obligations. The country is also actively exploring ways to use blockchain technology in government applications.
The government is currently studying the use of blockchain in identity management, health care, and supply chain management. The country’s central bank has said it will not issue its digital currency now. Still, it has been actively exploring the possibility of using blockchain technology to facilitate interbank payments. Several reliable platforms like quantum ai also offer their services to thousands of traders here.
As a result, Canada remains one of the few countries to have genuinely embraced the mainstream use of cryptocurrencies. Canada has a huge crypto market where many people practice both cryptocurrency trading and mining. Canadian exchanges are also some of the largest in the world. Bitcoin ATMs are available in many parts of the country, including Vancouver and Toronto.
The Reserve Bank of India (RBI), India’s main government-backed bank, issued a warning about cryptocurrencies in 2013. Still, it has not taken any formal steps toward regulating or banning them altogether but keeps the monitoring on.
India is strictly monitoring the selling of cryptocurrencies inside the country. The Reserve Bank of India has also warned its citizens about using cryptocurrencies for transactions. In March 2018, the RBI issued a circular stating that all regulated financial institutions must cut off all ties with businesses in virtual currencies.
On the other hand, India has also proven to be surprisingly willing to accept the future. The Reserve Bank of India has issued several documents about the use of digital currency in the professional sphere, and plans for a digital Rupee are currently in the works.
Germany is one of the most progressive countries regarding cryptocurrency acceptance. Germany has taken steps toward regulating cryptocurrencies, requiring exchanges to report suspicious transactions and potential money laundering. The German Ministry of Finance has also called for more regulation relating to ICOs. On top of that, Germany’s Federal Financial Supervisory Authority (BaFin) has opened up a branch dedicated entirely to cryptocurrency oversight.
While the trading of cryptocurrency sees high levels of regulation, Germany is a trading hotspot for BTC, ETH, and several other currencies.
Italy has also been quite progressive when it comes to cryptocurrency. In January 2018, the Italian government passed a new law that made it easier for businesses and individuals to use Bitcoin as payment. This is a great movement taken by the Italian government that makes cryptocurrencies widespread.
Ultimately, countries have different positions regarding cryptocurrencies. Some countries have taken several steps to go forward in embracing the use of digital currency. Contrarily, some other countries have chosen to regulate it first.
This is just a snapshot of how different countries have approached the use of cryptocurrencies. However, it’s important to note that the various stances taken by these governments are not set in stone and can change over time. Because of the increased interest of more and more people regarding cryptos, especially bitcoin, governments may be pressured into taking more decisive action on this topic.