Cryptocurrency has been around for quite some time. However, mainstream adoption has increased recently, with 2020 being a significant year to add to its importance. However, 2021 is a big year because countries all around the world have sought to adopt cryptocurrencies in some form or another. Similarly, several governments have started developing cryptocurrency legislation to oversee the exchange process.
We are yet to see the international cryptocurrency regulations. Now let us look at some government regulations on cryptocurrency set by different countries.
Even though cryptocurrency is legal in the US there are no comprehensive regulations on cryptocurrency activities. The Financial Crimes Enforcement Network (FinCEN) considers cryptocurrencies to be money transmitters. The Internal Revenue Service (IRS), on the other hand, views cryptocurrencies as a form of digital property. Also, Cryptocurrency exchanges are subject to the Bank Secrecy Act (BSA). Furthermore, the Securities and Exchange Commission (SEC) of the United States considers cryptocurrencies to be securities for which security laws apply.
The European Union
It is one of the pioneers to make cryptocurrency legal across the EU. But there are no specific regulations put in by the EU to regulate crypto activities. However, Crypto exchanges must comply with the EU’s anti-money laundering legislation, according to the 5th AML Directive.
Singapore has always been at the forefront of technological advancement and adoption. Similarly, the country has taken a favorable stance on cryptocurrency. To govern cryptocurrencies and encourage their acceptance, the Blockchain and Cryptocurrency Regulation, 2020 was signed.
Since cryptocurrency exchanges are very much legal, Australia has made cryptocurrency under Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF 2006), section 5, and related rules. In addition, bitcoin is treated as a kind of property in this country and is subject to Capital Gains Tax (CGT). In 2018, the Australian Transaction Reports and Analysis Centre (AUSTRAC) announced new regulations requiring crypto exchanges to register with the AML/CTF 2006 Part 6A – Digital Currency Exchange Register.
In Japan, Financial Services Agency (FSA) regulates all trading platforms of cryptocurrency. In 2017, under the Payment Services Act, Japan legalized cryptocurrency.
Canada is also quite positive towards cryptocurrency and crypto transactions are legal. Cryptocurrency is considered a commodity and so is classified as business income. Here the enterprises which deal with cryptocurrency should register with the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC)
Crypto exchanges are legal in South Korea, but cryptocurrencies are not. Taxes are expected to be levied on cryptocurrency transactions. The Ministry of Strategy and Finance has spelled out its proposal to levy a tax on crypto transactions, with a redesigned tax system set to go into effect in 2022.
Cryptocurrencies in Germany are regulated by the German Federal Financial Supervisory Authority (BaFin) and can be utilized for payment purposes. As a result, everyone who desires to conduct crypto transactions must first obtain authorization from the agency.