{"id":1409,"date":"2021-12-11T07:08:20","date_gmt":"2021-12-11T07:08:20","guid":{"rendered":"http:\/\/egrowonline.com\/?p=1409"},"modified":"2021-12-11T07:08:20","modified_gmt":"2021-12-11T07:08:20","slug":"crypto-rules-around-the-world","status":"publish","type":"post","link":"http:\/\/egrowonline.com\/?p=1409","title":{"rendered":"Crypto rules around the world"},"content":{"rendered":"


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Hi, its Zaheer. By all accounts, the Government of India will introduce a bill to regulate cryptocurrency in the ongoing winter session of Parliament, but nobody yet knows exactly what\u2019s in it. Will India ban all crypto assets or just a few? How will it regulate non-fungible tokens, which aren\u2019t currencies at all?<\/p>\n
\"bitcoin\"<\/div>\n

While we wait (and wait) for clarity, here\u2019s a look at crypto regulations in five countries, two of which are crypto-friendly, two that are crypto-hostile, and one that\u2019s just crypto-confused.<\/p>\n

The United States \u2014 Confused<\/span><\/p>\n

\"US<\/div>\n

Though it has more crypto investors, exchanges, trading platforms, mining companies and investment funds than any other country, the US still lacks clear official rules for the asset class.<\/p>\n

What\u2019s more, legislators and regulators seem woefully behind the curve. When executives from six major cryptocurrency firms went to the US House of Representatives earlier this week, it marked the first time that industry’s senior leaders explained their businesses to legislators, Reuters reported. <\/p>\n

The US Congress is unlikely to make new crypto rules any time soon, analysts told Reuters, and lawmakers treated the hearing mainly as a fact-finding exercise.<\/p>\n

Here\u2019s how muddled things are right now: the US Securities and Exchange Commission (SEC) \u2014 the most powerful regulator \u2014 typically views cryptocurrencies as securities, while the Commodity Futures Trading Commission calls Bitcoin a commodity, and the US Treasury calls it a currency. The Internal Revenue Service, meanwhile, defines cryptocurrencies as \u201ca digital representation of value that functions as a medium of exchange, a unit of account, and\/or a store of value\u201d, and has issued tax guidance.<\/p>\n

China \u2014 Hostile<\/span><\/p>\n

\"China<\/div>\n

China, like the US, is one of the world’s largest cryptocurrency markets. That\u2019s despite the Chinese government\u2019s extreme hostility towards cryptocurrencies that dates back to 2013. That December, a joint notice from the People\u2019s Bank of China, the information ministry, and other financial watchdogs barred banks from handling bitcoin-related transactions.<\/p>\n

In 2017, Chinese regulators banned initial coin offerings, a way of raising funds through cryptocurrencies that had gained popularity<\/a> \u2014 and notoriety<\/a>. That ban caused the price of Bitcoin to fall by 6%.<\/p>\n

Two years later, in April 2019, China\u2019s National Development and Reform Commission (NDRC) termed bitcoin mining an \u201cundesirable\u201d industry and recommended that it be restricted or phased out.<\/p>\n

In May 2021, Chinese Vice Premier Liu He and the State Council issued a warning, saying it was necessary to \u201ccrack down on Bitcoin mining and trading behavior, and resolutely prevent the transmission of individual risks to the social field\u201d. By then, authorities in Inner Mongolia, Xinjiang and Sichuan provinces \u2014 which were all major Bitcoin mining hubs \u2014 had already started introducing policies to stifle the operations of Bitcoin miners.<\/p>\n

On September 24, 2021 China’s central bank announced<\/a> that all cryptocurrency transactions were illegal, effectively banning the digital tokens. \u201cVirtual currency-related business activities are illegal financial activities,\u201d the People’s Bank of China said, warning that it \u201cseriously endangers the safety of people’s assets\u201d. China has since lost its status as the world\u2019s largest miner of Bitcoin as several large mining companies have shut shop or shifted abroad.<\/p>\n

Japan \u2014 Friendly<\/span><\/p>\n

\"Japan<\/div>\n

Japan, with progressive regulations, is one of the world\u2019s most crypto-friendly nations. While cryptocurrency exchanges must be registered and comply with traditional anti-money laundering and combating financing of terrorism rules, Japan does not have a single set of rules for all blockchain-based tokens. Instead, the legal status of a particular crypto token is determined by functions and uses.<\/p>\n

Currency and utility tokens such as Bitcoin and Ether are regulated under the Payment Services Act, while \u2018security tokens\u2019, which represent shares, bonds or fund interests in tokens, are regulated under the Financial Instruments and Exchange Act.<\/p>\n

Importantly, non-fungible tokens and other crypto assets that cannot serve as a means of payment (because every NFT is by definition unique)<\/a> are not regulated as financial assets at all.<\/p>\n

Bangladesh \u2014 Hostile but softening<\/span><\/p>\n

\"Bangladesh\"<\/div>\n

Bangladesh, like India, has historically been hostile toward cryptocurrencies. In 2017, the country\u2019s central bank warned that cryptocurrencies were considered illegal in Bangladesh, saying that transacting with it may violate existing rules to combat money laundering and terrorist financing. The notice states that Bitcoin transactions \u201care not authorised by the Bangladesh Bank or any regulatory agencies, and do not conform with provisions of the Foreign Exchange Regulation Act, 1947, and Anti-Terrorism Act, 2009, and the Money Laundering Prevention Act, 2012\u201d.<\/p>\n

But in 2020, the government published the National Blockchain Strategy: Pathway to be a Blockchain-enabled Nation<\/a>, recognising the importance of the emerging technology.<\/p>\n

It said: \u201cBlockchain technology is widely regarded as one of the core and foundational technologies that will be one of the driving forces for the upcoming fourth industrial revolution\u2026 Only countries with expertise in these emerging technologies can successfully meet the challenges and exploit the opportunities…. This strategy recognises the need to explore blockchain technology in order to advance its technical capacity, increase efficiency in e-governances, and foster innovations. Here, we would like to highlight our extraordinary ambition: to guide Bangladesh into a blockchain-enabled nation.\u201d<\/p>\n

Portugal \u2014 Friendly<\/span><\/p>\n

\"Portugal\"<\/div>\n

Portugal is widely seen as the most crypto-friendly country in Europe. Its non-habitual tax regime has attracted many crypto traders as it offers tax exemptions and reductions for 10 years for individuals of high cultural or economic worth. \u201cAn exchange of cryptocurrency for \u2018real\u2019 currency constitutes an on-demand, VAT-free exercise of services,\u201d Portuguese tax authorities have said, according to Reuters.<\/p>\n

On April 21, 2020, the government passed the Digital Transitional Action Plan, which established \u201cfree zones\u201d to test crypto technology. The three main goals of the programme are digital inclusion of people, digital transformation of businesses, and the digitalisation of the state.<\/p>\n

And in June 2021, Banco de Portugal for the first time issued operating licenses to two cryptocurrency exchanges, Criptoloja and Mind The Coin, recognising them as official \u201cvirtual asset providers\u201d.<\/p>\n

OTHER BIG STORIES BY OUR REPORTERS<\/span><\/p>\n

With 60% market share, Flipkart has a cracker of a Diwali<\/span><\/p>\n

\"Flipkart\"<\/div>\n

The Flipkart Group, including fashion portal Myntra, bagged a market share of around 60% during this year\u2019s Diwali sales<\/a>, according to data from PGA Labs. Amazon India, meanwhile, accounted for 32% of total sales, compared with around 25% last year.<\/p>\n