While there are no laws in the world of cryptocurrency. Authorities from across the world have expressed a need to bring cryptocurrency within the regulatory perimeter, and fundamental challenges do exist.
Cryptocurrency Regulation in India
In India’s cryptocurrency ecosystem stakeholders are looking forward with a hope that India will come up with a rule to accept and regulate cryptocurrencies instead of announcing a blanket ban.
US president Joe Biden hosted a virtual summit, then Prime Minister Narendra Modi said that emerging technologies like cryptocurrencies should be used to empower democracy, not to undermine it.
The statement comes at a time when the entire world is coming up with its own set of regulations to deal with the emerging asset class.
While some countries partially control the flow of cryptocurrency transactions and other countries completely banned cryptocurrencies, the Indian government made it clear that they are not looking to ban cryptocurrencies; however, they are looking to regulate them like assets.
And, all the cryptocurrency exchanges will come under the purview of the Securities and Exchange Board of India (SEBI).
Further, Citizens would not be permitted to hold their crypto assets on foreign exchanges or in private wallets according to their cabinet notes.
Cryptocurrency Regulation in the United States
Crypto exchanges in the United States come under the regulatory scope of the Bank Secrecy Act (BSA) and they are to register with the Financial Crimes Enforcement Network (FinCEN). They are also to comply with anti-money laundering (AML) and combating the financing of terrorism (CFT) obligations.
Unlike dollar bills and coins, cryptocurrencies are not issued or backed by the U.S. government or any other government or Central Bank.
The US has a dual system (State and Federal) where the acceptance of cryptocurrency transactions completely depends on the law of a particular state.
Right now, cryptocurrencies fall under the jurisdiction of the SEC for investment. The CTFC for any crimes involving interstate commerce, and the IRS, making it subject to either income or a capital gains tax.
Digital or virtual currencies are used as a medium of exchange but are not regular money.
Different states of the USA might hold varied regulations related to crypto, but the overall sentiment in the country remains positive towards the trading community.
Purchase and exchange of cryptocurrencies are absolutely legal across the country. However, there is no federal legislation for crypto assets in the US. The bodies at the federal level have guided states.
Cryptocurrency Regulation in the European Union
Cryptocurrencies are legal across the European Union with individual member-state regulations. Also, cryptocurrency taxation differs from country to country, and some charge tax on derived earnings at rates of 0 to 50%
The European Union has 27 countries and legislations at the union level. Each country has a separate framework regarding regulating this industry.
The EU countries are: Austria, Belgium, Bulgaria, Croatia, Republic of Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, and Sweden.
The majority of the countries support a soft-touch regulatory framework. This framework increases consumer protection, defines crypto industry conduct, and introduces new licensing requirements.
European Commission released draft legislation in the title of Markets in Crypto Assets Regulation (MICA) legislation. Once this draft comes into effect, the legislation allows cryptocurrencies to be treated as regulated financial instrument.
Julie is a renowned crypto journalist with a passion for uncovering the latest trends in blockchain and cryptocurrency. With over a decade of experience, she has become a trusted voice in the industry, providing insightful analysis and in-depth reporting on groundbreaking developments. Julie's work has been featured in leading publications, solidifying her reputation as a leading expert in the field.
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