Cryptocurrency or Crypto is a digital or a virtual asset that is secured by cryptography which secures the transactions and makes counterfeit or double-spending near to impossible. Right now, there are more than 1000 cryptocurrencies that exist in the world, but Bitcoin dominates the world of cryptocurrency that attracts most investors around the globe. Though Bitcoin is the world’s biggest cryptocurrency, its legality varies across different territories and many are still unsure or working through the legal issues.
Since the popularity of Bitcoin and other cryptos has increased drastically and gradually started winning institutional endorsements, an administrative debate has also increased.
Regulators and governments in some nations embrace and accept the newly formed digital currency while many are still opposing this asset class. The rules for using and handling cryptos are different for different nations. Let’s have a look at how cryptos are regulated in different parts of the world.
India: So far, Bitcoin and other cryptocurrencies are not illegal in India. Due to its recent introduction, authorities and lawmakers are in a view to adopt the new technology early. But there are too many speculations related to its legality and usage. Although RBI announced the ban on the usage of Bitcoin and other cryptos, but it has not materialised so far. No one can deny the fact that India’s climate around cryptos is becoming progressively active. With around USD 64 million trading volume of Bitcoin, India’s market in Bitcoin is one of the fastest-growing markets in the world. Some of the crypto exchanges in the country are Coinswitch, Unocoin, CoinDCX.
China: China doesn’t consider cryptos as legal tender. Further, their banking sector does not provide financial services related to them. For the sake of investors’ security and financial risk management, the government has taken regulatory measures to reduce the practices for cryptos. The country has declared initial coin offering as an illegal activity. China has a USD 198 million trading volume of Bitcoin and some of the popular exchanges in the country are CEX.io. and BTCC.
USA: Bitcoin became a legal cryptocurrency in the USA in 2020. In 2015, Commodity Futures Trading Commission [CFTC] identified Bitcoin as a Commodity. It got listed as a convertible decentralised cryptocurrency by US Treasury. IRS has taken an increasing interest in it and issued guidelines for taxpayers. The USA has the biggest market for Bitcoin and it has a trading volume of around USD 1.5 billion. Coinbase, Gemini and Binance are some of the most popular Bitcoin exchanges in the US.
Even though many countries have taken steps to understand blockchain technology but still it has a long way to go to become a legal currency in the whole world. Since Bitcoin is still a new currency, it will be too early to say about the risks associated with it and about its future.