Cryptocurrency today — Embrace it or ban it, but you just can’t ignore it.
Cryptocurrencies are rapidly strengthening their foothold in the global economy, and governments across nations are being pressed to take a call on their status. A few countries have banned them outrightly, a lot of them are still exploring their pros and cons, and many of them have already embraced them or are in the process of creating a favourable regulatory framework for them.
Let us take a look at the top 7 countries in the world today which have recognised the myriad opportunities of innovation and development offered by cryptocurrencies, and adopted a positive stance towards cryptocurrencies -
Malta — Malta is small, densely populated European country with a comprehensive regulatory framework for cryptocurrency businesses. The Malta Digital Innovation Authority (MDIA) is seeking to certify the blockchain platforms used by businesses and improve the verification processes for users of crypto platforms. Malta’s Prime Minister, Joseph Muscat, has stated that Malta’s aim is to become “global trailblazers in the regulation of blockchain-based businesses and the jurisdiction of quality and choice for world class fintech companies.”
Estonia — This small Northern European country has always been technologically advanced. It is the birthplace of Skype, and it was quick to embrace cryptocurrencies and blockchain technology as well. In Estonia, bitcoin is as an alternative currency, and not a security, and profits from it are subject to capital gains tax but not VAT. For cryptocurrency businesses, Estonia has an e-residency programme in place which allows foreign entrepreneurs to get a government-issued digital ID, register an EU company, access business banking and payments services and digitally sign documents with appropriate tools.
Switzerland — Switzerland is yet another European country with a positive stance on cryptocurrencies. The country’s city of Zug, which has been nicknamed “Crypto Valley” in the crypto-sphere, hosts many prominent blockchain and cryptocurrency businesses. The regulations mandate crypto holdings to be declared, and they are subject to wealth tax and income tax. The country requires all crypto businesses to comply with the Swiss anti-money laundering (AML) legislation.
Japan — Japan is among the most crypto-friendly nations in the world, with several businesses in cities like Tokyo accepting bitcoin for payments. It was the first country to regulate cryptocurrency trading. Today, nearly half of bitcoin’s daily volume is traded in Yen. Japan has strict KYC and AML regulations for the cryptocurrency industry in place, and the country is expected to have a regulatory framework for ICOs soon.
The United States of America — The USA is among countries with the highest number of cryptocurrency adopters globally. While the US government is not averse to cryptocurrencies, it hasn’t officially legalized them either. In 2013, FinCen, a bureau of the Treasury Department has stated that “virtual currency does not have legal tender status in any jurisdiction”. It is expected that the country will have some form of cryptocurrency regulation soon. Many cryptocurrencies are thriving in the country, though the SEC is cracking down on securities posing as utility tokens. It recently rejected all the bitcoin ETFs proposed so far. However, that doesn’t mean that the US is not in favour of cryptocurrencies. The SEC’s rejections have been on the grounds that the bitcoin ETF proposals have not been “consistent with the requirements of the Exchange Act Section 6(b)(5).” It is quite probable that cryptocurrencies and related products will get regulated favourably in the coming future when the mature has appropriate tools to keep on manipulative practices and frauds.
Gibraltar — The country of Gibraltar has attracted numerous blockchain and cryptocurrency businesses. The Distributed Ledger Technology Regulatory Framework, which was established in January 2018 grants formal licenses to crypto companies in the country. A taxation framework for cryptocurrency businesses is still in process.
Slovenia — Slovenia is the home to many crypto startups owing to its crypto-friendly legislations. The government has warned its citizens of the potential risks of participating in ICOs, but there is no regulatory framework for governing them. However, the present government is keen on developing the country as a crypto nation. The PM of the country “want[s]to position Slovenia as the most recognised blockchain destination in the European Union.”
South Korea — Bitcoin is not a legal tender in South Korea, but it is not banned in South Korea either. South Korea. South Korea accounts for 4% of the total bitcoin trading in the world. In January this year, Financial Services Commission imposed a ban on local finance firms from trading bitcoin futures, and on the use of anonymous bank accounts for crypto trading. However, the government doesn’t intend on banning cryptocurrency trading altogether. The country is also in the process of developing a regulating framework for ICOs. Recently, Min Byung-Doo, the chairman of Korea’s National Policy Committee, recently emphasised on the need to legalize and regulate the ICO market. “Regulation is not bad. Regulation is necessary, it is the only way to legitimize the market and allow investors to build trust towards the cryptocurrency market,” he said.