As the market capitalization of the cryptocurrency market shoots up, through price movements and a surge in new tokens, regulators around the world are stepping up the debate on oversight into the use and trading of digital assets.
This affects all cryptocurrencies, but especially bitcoin, given its market leadership and integration into the global startup ecosystem. Very few countries have gone as far as to declare bitcoin illegal. That does not, however, mean that bitcoin is “legal tender” — so far, only Japan has gone as far as to give bitcoin that designation.
However, just because something isn’t legal tender, does not mean that it cannot be used for payment — it just means that there are no protections for either the consumer or the merchant, and that its use as payment is completely discretionary.
Other jurisdictions are still mulling what steps to take. Larger institutions, such as the European Commission, recognize the need for dialogue and deliberation, while the European Central Bank ECB believes that cryptocurrencies are not yet mature enough for regulation although with bitcoin almost 10 years old, one is left wondering when we will know it has reached sufficient maturity.
In the United States, the issue is complicated further by the fractured regulatory map — who would do the legislating, the federal government or individual states? A related question in other countries, to which there is not yet a clear answer, is: In some countries they are one and the same thing, but in most developed nations, they are separate institutions with distinct remits.
Another divisive issue is: France is pushing for the G20 an international forum for governments and central banks to discuss establishing parameters at the upcoming summit in April A further distinction needs to be made between regulation of the cryptocurrency itself is it a commodity or a currency, is it legal tender? In a few countries the considerations are tied together — in most others, they have been dealt with separately.
Below is a brief summary of pronouncements made by certain countries. This list is updated monthly. That same month, the tax authorities removed the “double taxation” of bitcoin, which was a result of a decision in to treat the cryptocurrency as a “bartered good” rather than a currency or asset.
As of the end ofcryptocurrency exchanges have to register with the country’s financial intelligence agency Austrac, and comply with customer verification and record preservation requirements. Further moves are unlikely for now, however, as officials from the central bank recently said that regulation is not needed for the use of cryptocurrencies as payment. Argentina In spite of a strong bitcoin ecosystemArgentina has not yet drawn up regulations for the cryptocurrency, although the central bank has issued official warnings of the risks involved.
Bangladesh InBangladesh expressly declared that using cryptocurrencies was a “punishable offence. Canada Canada was one of the first countries to draw up what could be considered “bitcoin legislation,” with the passage of Bill C inwhich designated “virtual currency businesses” as “money service businesses,” compelling them to comply with anti-money laundering and know-your-client requirements.
The government has specified that bitcoin is not legal tenderand the country’s tax authority has deemed bitcoin transactions taxable, depending on the type of activity. China While China has not banned bitcoin and insists it has no plans to do soit has cracked down on bitcoin exchanges – all major bitcoin exchanges in the country, including OKCoin, Huobi, BTC China, and ViaBTC, suspended order book trading of digital assets against the yuan in It also appears to be withdrawing preferential treatment tax deductions and cheap electricity for bitcoin miners.
Ecuador Inthe National Assembly of Ecuador banned bitcoin and decentralized digital currencies while establishing guidelines for the creation of a new, state-run currency.
While this is not legally binding, it does count as a high-level legal opinion.