GOVERNMENT REGULATIONS AND THE FUTURE OF CRYPTOCURRENCY:

What is cryptocurrency:
A cryptocurrency is a digital currency created and stored electronically in blockchains.
It uses encryption techniques to control creation of monetary units and to verify the transfer of funds. Hence it is very secure. It has no physical form and is not redeemable in another commodity like gold. Its supply is not determined by any central bank or authority and the network is completely decentralised.
Why virtual currencies are not backed by government:
These are the main reasons
• The Virtual currencies don’t have intrinsic value and are not backed by any kind of assets.
• Digital technology, cryptocurrencies will be subject to cybersecurity breaches, and may fall into the hands of hackers
• No way to reverse the payment
• Illegal activities
• Since it is decentralized technology, it’s not possible to track the transactions made through virtual currencies.it result in the illegal activities.

Countries which are accepting cryptocurrency:
Here there are some countries which are accepting cryptocurrency
• United States of America
• Sweden
• Canada
• Australia
• The European Union

Countries That Say No to Bitcoin
Here there are some countries which are not accepting cryptocurrency
• Iceland
• Vietnam
• Bolivia
• Kyrgyzstan
• Ecuador
• Russia
• China
• India

Here there are regulations for different countries

1. Venezuela cryptocurrency (Petro)
   Petro is the cryptocurrency launched by Venezuela government in Feb 2018 backed by the county’s oil and mineral reserves
   According to OPEC (Organization of the Petroleum Exporting Countries) Venezuela owns the largest volume of retrievable proved oil reserves. The Petro aims to capitalize on what is the only commodity Venezuela can offer the international market by tethering the value of one Petro token to the price of one barrel of Venezuelan crude oil— roughly $60 USD at the current market price.

2. Sweden:
   Sweden is the second largest fintech hub in Europe It is one of the countries that is moving towards a cash-less society. Sweden is among the leaders in the global bitcoin market. They are having very high-level of knowledge about it, and a high-level of digital competence in the Fintech space.
   They have launched their own cryptocurrency e-krona powered by IOTA (Internet of things) is one of the most important cryptocurrencies in the market. The e-krona is primarily intended for smaller payments between consumers, companies and authorities. It uses a distributed ledger technology that it is known as Tangle and it has the peculiarity that it does not have blocks, chain or miners. In this way, participants must actively participate in the consensus of the network if they want to make transactions.
   After the kapiton case of scam, Swedish government made a proper regulation that can cover the bitcoin miners.
   An increasing number of bitcoin miners and mining centre operators have started to relocate to Sweden, given its cold climate that provides a naturally cool environment for bitcoin miners which tend to overheat, cheap electricity, and low-cost hydroelectric power.

3. Canada:
   The Financial Consumer Agency in Canada does not consider cryptocurrencies to be “legal tender”
   In Canada, amendments to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTF) that passed in 2014.
   The Authorite des Marches Financiers, the regulator in the province of Quebec, has declared that some bitcoin related business models including exchanges and ATMs are regulated under its current MSB (Money services business).
   Canada is home for the cryptocurrency mining
   Two of the main conditions to run a profitable Bitcoin mining business is cheap electricity and a preferably cold climate. Canada has a relative abundance of cheap electricity as of right now. As this energy is not used, it makes sense for Bitcoin mining operators to explore new opportunities in this country.

4. India:
   Indian government is not entertaining any cryptocurrency trading in India.
   RBI Verdict on Cryptocurrencies:
   Reserve bank of India announced its first bi-monthly monetary policy for the FY 2018-19 has announced that any entity regulated by them such as banks, wallets etc. shall not deal with or provide services to any individual or business entities for buying or selling of cryptocurrency such as bitcoins. If banks, e-wallets and any other entities regulated by RBI are not allowed to facilitate sale or purchase of cryptocurrencies, obviously individuals will not be able to transfer money from their bank accounts to their crypto-trading wallets.
   A person will not be able to transfer money from his savings account to his crypto wallet.
   After the RBI verdict, An Ahmedabad base Cryptocurrency platform
   Kali Digital Eco-Systems, which runs the crypto exchange CoinRecoil, has made the RBI, the finance ministry and the GST Council respondents to the petition
   alleging that the guideline violates Articles 19 (1) (g) and 14 of the Constitution.
   kali digital systems claiming that RBI is violating the “Article 301 of Indian constitution” (Freedom of expression)

1. USA Regulation:
   The Commodity Futures Trading Commission (CFTC)is regulating the virtual currencies as commodities
   If any virtual currency wants to trade in US it must be registered to with Securities and Exchange Commission.
   Tax regulation:
   • Trading cryptocurrency to a fiat currency like the dollar is a taxable event.
   • Using cryptocurrency for goods and services is a taxable event

2. Russia:
   Russia is absolutely positive about cryptocurrency adoption in the country.
   Russia’s president Vladimir Putin has signalled cryptocurrency regulation in the country should become law “by July 1” of 2018.
   Russia’s Ministry of Finance has put the spotlight on legal guidelines for the issuance of initial coin offerings (ICOs) while the country’s central bank has prepared a separate draft law on crowdfunding for the upcoming new technology.

3. China:
   People’s bank of china (PBOC) has tightened its regulations on domestic crypto investors engaging in foreign transactions of ICOs and virtual currency as the market remains unstable.
   PBOC prohibited financial institutions from providing any funding to activities related to cryptocurrencies.
   Why they banned?
   Lot of risk for the monetary system due to the unlawful issuance of cryptocurrencies which may also involve multi-level marketing and Ponzi schemes to scam less crypto-savvy citizens out of their hard-earned money.

4. Japan:
   Japan regulatory standards for cryptocurrency are the benchmark for the other countries. No other country has put in place national regulatory standards for cryptocurrency exchanges at the level of the Japanese.
   The Japanese Financial Services Agency (FSA) initially licensed eleven exchanges on September 2017.
   Two Japanese digital currency exchanges, Mr. Exchange and Tokyo Gateway, has been closed its operations and returned customers’ cash and cryptocurrency holdings. Due to some issues with internal controls and corporate governance.
   After heist of $530 million digital money in January 2018, Government-registered cryptocurrency exchanges are planning to set up a self-regulatory body.

5. Estonia:
   The country of 1.3 million people is one of the most technologically savvy in the continent’s ex-communist east, turning to computers for everything from filing taxes to voting in elections. It even offers foreigners access to its digital infrastructure, via its e-residency program. The boss of that initiative wants to offer the crypto-currency to the more than 27,000 people -- mainly from Finland, Russia and Ukraine -- who use e-residency.
   Estonia is planning to launch their own cryptocurrency “estcoin”
   e residency: It is a program that allows non-Estonians access to Estonian services such as company formation, banking, payment processing, and taxation.
   Limitation:
   E-residency is not related to citizenship and does not give the right to physically enter or reside in Estonia.
   Benefits:
   They will provide the service of exchanging a virtual currency against a fiat currency& Providers of a virtual currency wallet service
   Taxation of cryptocurrency transactions in Estonia:
   Taxation of virtual currency transactions depend on the nature of the transaction.
   There is no direct taxation if the token is sold or bought like security or investment or other currency.

6. Saudi Arabia:
   On Feb 2018 Saudi Arabian Monetary Authority (SAMA) has signed an agreement with the U.S.-based blockchain company Ripple. Ripple’s cryptocurrency is currently the third largest on the market, behind Bitcoin and Ethereum
   SAMA is the second central bank globally to introduce Ripple’s blockchain-based cross-border payments platform, following the Bank of England’s pilot project in 2017. Few cryptocurrency companies claim to offer services for residents of the kingdom. One such company is Paxful, which says it has sold over 1,00,000 bitcoins in the country. Another is BitOasis, which serves users across the Middle East and North Africa.

7. Australia:
   Australia declared bitcoin as the legal tender on 1st July 2017
   Cryptocurrency exchanges operating in Australia must have register with Australian Transaction Reports and Analysis Centre (AUSTRAC)
   It mandatory for digital currency exchange businesses to meet anti-money-laundering and counter-terrorism financing (AML/CTF) guidelines.

8. New Zealand:
   New Zealand is a laboratory for global blockchain developments. There are a growing number of blockchain launches involving Kiwi firms including Blockchain Lab NZ which had helped raise over NZ$410 million ($296 million USD) through initial coin offerings,” New Zealand has no strict rules for these enterprises. That would allow the market to grow but without harming local and international projects that chose the island to start operating.
   The Inland Revenue Department (IRD) is reminding cryptocurrency investors of their tax obligations. It says, when person acquire cryptocurrency for selling or exchanging then it comes under taxable transaction.

9. Singapore:
   The Monetary Authority of Singapore (MAS), like many financial regulators, warned of risks of speculating in the cryptocurrency markets during the December 2017 peak in bitcoin prices. But after considering country laws Singapore’s Deputy Prime Minister Tharman Shanmugaratnam said that it doesn’t make any distinction between transactions conducted using fiat currency, cryptocurrency or other novel ways of transmitting value. Finally, chief fintech officer Mohanty also stated regulators would need to apply consumer protections for digital currencies like bitcoin for it to continue to grow.

10. Switzerland:
    Switzerland has long been a global centre for the wealth management industry.
    Undoubtedly Switzerland is an attractive place for ICOs both for investors and issuers due to the favourable Swiss tax laws. Cryptocurrencies are neither money nor a foreign currency, nor a financial supply for goods and services tax (GST) purposes.

On January 18, 2018, the Swiss set up an ICO working group with an aim to increase legal certainty, maintain the integrity of the financial centre and ensure technology-neutral regulation.

1. Ghana:

The futures of cryptocurrencies in Africa is bright, as it has moved from just being currencies into various useful platforms that will be essential to the African continent.
16-year-old Elisha Owusu Akyaw. Senior High School student is cashing in the opportunities. Currently, Elisha is the Chief Executive Officer (CEO) of Token Media, a cryptocurrency marketing firm he set up in 2017 to help blockchain projects reach their target audience.
Ghana is gradually catching up with the Bitcoin fever as the country hosted its first blockchain conference last November.
Finally, Ghana has positive stance on cryptocurrency.

1. Bolivia: The Central Bank of Bolivia issued a resolution banning bitcoin and any other currency not regulated by a country or economic zone in 2014
2. Cayman Islands:
   The Cayman Islands are seeing an upsurge in ICO related business.
   No specific legislation has been passed by the Cayman Islands Government about ICOs and cryptocurrencies, it would be incorrect to say that ICOs are “unregulated". Until unless Government completely understand the ICO and cryptocurrency potential benefits they would not pass any regulations about cryptocurrency.
   However, these existing regulations are applicable for the ICO offerings.
   • The Securities Investment Business Law
   • Anti-Money Laundering Law
   • Money Services Law
   • Automatic Exchange of Information

Future of cryptocurrency:
According to famous futurists predictions cryptocurrencies are going to displace roughly 25% of national currencies by 2030. This will be the main threat for the banking industry
Here there are some facts about cryptocurrency:

• They’re just much more efficient, the way they run.
• Its value will be continued to be cyclical.
• Large companies such as Amazon, Walmart and Starbucks might issue digital coins that inspire trust and gain wide acceptance.
• The Federal Reserve could issue its own digital currency, as some global central banks are exploring.
Reports shows that they have given remarkable returns on Investments.
By considering these factors, if the Government regulations are favour to the cryptocurrency trading, it replaces the traditional banking system and payment systems.

Verdict:
There are different countries having different regulations for cryptocurrency regulations for cryptocurrency, like Sweden, United states of America and Estonia they all are leaders in the technology and they have very good technical support for mining. Their government always wants to be in the leading position of technology adoption are hence they are accepting it as legal tender.
Some countries like India, china, Russia they are positive about adopting blockchain technology but not willing to accept cryptocurrencies as a legal tender because they are considering it as multilevel marketing and Ponzi schemes. It may result in the lagging behind the technology adoption.