As crypto becomes more popular worldwide, it shouldn’t be a surprise that it’s also rapidly started becoming much more regulated. Think about it this way: until now, governments and fiscal authorities like banks have had total control over digital transactions worldwide. Click at the HomePage for extra details.
They’re not just going to give that up, right?
However, it’s not all bad news. While yes, some countries have posed severe restrictions on the trading of crypto, others have provided introductory frameworks to make sure criminals can’t use blockchain systems to launder their money.
With that said, here’s a look at how some of the leading countries in the world have started regulating crypto usage and trading!
The United States
One of the countries doing their very best to regulate the usage of crypto while also allowing people their freedom with it, the US has taken several steps to start providing some legal framework regarding cryptocurrency.
Market regulators like the SEC (the Securities and Exchange Commission) and the CFTC (Commodity Futures Trading Commission) have been handed control of crypto, meaning they will start looking into new cryptocurrencies, significant transactions, and other such things for signs of criminal activity.
You can see the steps they’re already taking in situations like the famous 2020 Ripple lawsuit. The SEC filed this against Ripple Labs, the developer, for selling their native token, XRP, as an unregistered security. Exchanges such as Binance and Coinbase have also drawn the SEC’s ire for failing to report their transactions and not paying the relevant taxes on trading crypto.
However, the US does recognize that cryptocurrency is here to stay. The SEC will likely take steps to regulate the mining, trading, and other usages of crypto in the coming years. Still, people in the US can rest assured that being banned or put under severe restrictions is very unlikely.
Well, we have bad news: China is one country that doesn’t look favorably towards cryptocurrency at all. The Chinese government has taken steps to ban cryptocurrency trading.
This is one of the most drastic bans in recent memory: The government banned all cryptocurrency exchanges and ICOs in September 2017 and then proceeded to block websites that had anything to do with cryptocurrencies or ICOs by February 2018.
The Chinese government also effectively banned Bitcoin miners from operating in the country, forcing them to close operations altogether or move to a country where it was allowed.
With that said, China, along with India and the US, is one of the countries looking to develop its own national central bank digital currency (also called a CBDC). The first round of test programs rolled out in August 2022, and tests are still ongoing to determine whether or not CBDC is the best solution for their economy.
Surprisingly, the UK has a very advanced regulatory framework regarding cryptocurrency. Digital currencies like BTC and ETH are considered property in the UK, and exchanges must register with the fiscal authority, Financial Conduct Authority (FCA).
Exchanges operating in the UK have requirements like KYC forms, anti-money laundering laws, and customer protection rules. The UK government has also set up a task force to investigate the role of cryptocurrencies in the country’s economy.
Taxability in the UK is primarily focused on capital gains tax. Still, additional taxes also take into account the activities undertaken and who was making the transaction. Here’s a spot of good news: in October 2022, the Lower House of Parliament recognized crypto as a regulated financial instrument, meaning crypto users are now subject to investor protection laws.
In South Korea, cryptocurrency exchanges are required to register with the Korea Financial Intelligence Unit, but are allowed to operate normally otherwise. In 2021, the country banned all privacy coins from being traded on exchanges due to concerns over criminal activity.
Additionally, a new 20% tax on digital assets was approved and set to take effect the following year, but it has since been postponed until 2025. As a result, it is advisable to handle any cryptocurrency-related matters before that time.
South Korea is currently working on implementing the Digital Asset Basic Act, a regulatory framework that is expected to be finalized in 2023, which will provide further guidelines and regulations for the country’s cryptocurrency industry.
Different countries have different reactions to crypto —but it’s always important to be aware of the laws in your area. You don’t want to be caught off-guard by a sudden ban or other restrictions. You can follow up with Yuan pay group for more vital updates.