Cryptocurrencies exist independently of any government. However, the virtual world of Crypto and the old world of Government interact in a number of ways. Cryptocurrencies have implications for tax, financial regulation, and business innovation. As such, governments around the world are having to come to terms with Crypto.
2017 was the year the Initial Coin Offering (ICO) market exploded. In the last quarter alone, companies using this method of raising capital were able to generate 3.1 billion dollars in funding. For the booming market of blockchain enterprises and cryptocurrencies, 2018 is shaping up to be the year of the implementation of government regulation, and this new approach has already kicked off.
In India, the country’s central banking authority RBI gave banks three months to cease all cryptocurrency related activities, meaning only crypto-crypto exchanges like CoinDCX will be able to operate normally.
Following that decision, we think it might be useful to look at other major countries and what their regulatory plans are.
At present, the Securities and Exchange Commission (SEC) still doesn’t have a defined position on cryptocurrencies. They have warned against the dangers of investing in unregulated ICOs, and have even shut down a few, but their focus seems to be in stamping out any suspect illicit activity.
The SEC has stated regulation is needed, but the exact parameters in which it’ll be brought on remain unclear. Given the lack of a national government sanctioned approach to the crypto market, a state by state approach is needed. Some analysts indicate that once the difference between cryptocurrencies and securities is established, the legal framework will become more evident. Until then, the world will have to wait to see how the United States will treat cryptos & ICOs.
So far, Chinese authorities have not been kind on cryptocurrencies. After an initial friendly approach which included state-subsidised electricity for mining, the Chinese government has begun to crack down on the market, prohibiting ICOs, freezing exchange accounts, and banned mining as well as all internet traffic related to bitcoin & altcoins.
Even though that happened in a context of stopping capital flowing out of the country due to a massive corruption scandal, blockchain enthusiasts should be worried. Let’s hope the rest of the world doesn’t follow China’s lead.
European Union and UK
Despite the impending Brexit on March 2019, the European Union and the United Kingdom seem to share a similar approach towards cryptocurrencies, and it is the same as the United States — to stifle all criminal undertakings involving bitcoin & altcoins.
Officials from both sides have mentioned exchanges need to know their customers so they can identify all criminals and tax evaders currently using cryptocurrency for their nefarious purposes.
However, they have mentioned they do not plan to ban bitcoin. Much like in the American case, we should expect an official regulatory position this spring.
Japan is the global leader in the market development of cryptocurrencies. Japan is perhaps the most enthusiastic nation when it comes to the legality of Bitcoin.
As of Jan. 15, 2018, Yen accounts for 56.2 percent of bitcoin.
The country has shown an active interest in the cryptocurrency. Japan is home to a number of Bitcoin exchanges and while there are some regulations — the country isn’t very strict. It is likely that Bitcoins will get some sort of a legal status in Japan soon.
Japan’s No.1 position is owed to a solid legal system supporting the industry to build credibility among individual investors, as well as Japanese familiarity with securities trading, said Midori Kanemitsu, the chief financial officer of Japan’s largest cryptocurrency exchange operator, bitFlyer Inc.
Which countries have banned Bitcoin?
In countries, such as China, Russia, Thailand, Vietnam, Taiwan, Colombia, Ecuador, Bolivia, Bangladesh and Kyrgyzstan Bitcoin and Cryptocurrencies are banned.
Is Bitcoin legal in India?
Short answer: YES.
Bitcoin is legal at least right now at the time of writing this blog. RBI has mandated all the RBI entities (like banks) do not provide any services to crypto-entities (like crypto exchanges and wallets).
This means Crypto exchanges won’t be able to offer trading in INR (Indian Rupees) as they won’t have a bank partner to take care of all the deposits and withdrawals. Crypto exchanges may have to change their model to Crypto-Crypto like CoinDCX until government allows Indian exchanges to start fiat-pairing to trade cryptocurrencies. Until then, what you should do with your cryptos after the RBI ban?
Read the blog post below to know more:
These are interesting times in the blockchain revolution. This decision may have the power to impact the future of technology and decide who would be the next superpower.
Regulation is needed so that our cryptocurrency investments are protected. The key thing to bear in mind is that the desire to institute a proper governance model for this market doesn’t end up eradicating said market.
That requires a sensible approach that takes into account the potential for innovation inherent to blockchain technology without killing the market in favor of centrally-regulated, government or central bank-issued tokens. When that happens, cryptocurrencies won’t be the libertarian utopia some of its proponents unrealistically expect it to be, but more investors will be able to enter the market which means more money will go towards blockchain projects designed to improve lives across the globe.
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