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Cryptocurrency has been here for a long time now. However, its mainstream adoption has boosted lately with 2020 being a remarkable year to add to its significance. But 2021 is a major push as countries across the globe have tried accepting cryptocurrency in some form or the other. Similarly, these countries have also been working on cryptocurrency regulations to govern the process of exchanging through crypto.
We still are yet to witness international regulations on cryptocurrency. However, looking at the evolving landscape of crypto, it is quite evident that we may witness it soon. Today, we will know about different countries that have managed to set government regulations on cryptocurrency.
While cryptocurrency is legal in the states, there is no comprehensive regulation to govern crypto activities. For example, the Financial Crimes Enforcement Network (FinCEN) puts across cryptocurrency to be money transmitters. On the other hand, The Internal Revenue Service (IRS) puts across cryptocurrency as property, a digital one. However, cryptocurrency exchanges fall under the Bank Secrecy Act (BSA). Also, the US Securities and Exchange Commission (SEC) puts across cryptocurrencies to be securities on which security laws are very much applicable.
The EU has been in the limelight as it is one of the initial countries to make cryptocurrency legal across the EU. Nonetheless, there is no specific regulation passed by the EU that governs crypto activities. But, The 5th AML Directive directs that crypto exchanges follow the EU's anti-money laundering regulations.
Singapore has been at the forefront of technology adoption and advancement. Similarly, with regards to crypto, the country has reflected a positive attitude. Lately, Blockchain and Cryptocurrency Regulation, 2020 was signed to regulate cryptocurrency and accelerate its adoption.
Cryptocurrency exchanges are very much legal in this country. Since they are legal, Australia's government has subjected cryptocurrency to Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF 2006), section 5, and associated rules. Also, cryptocurrency is treated like property here and is subject to Capital Gains Tax (CGT). In 2018, the Australian Transaction Reports and Analysis Centre (AUSTRAC) set out some new regulations wherein crypto exchanges will be registered with AUSTRAC, in compliance with the AML/CTF 2006 Part 6A – Digital Currency Exchange Register.
Japan's Financial Services Agency (FSA) governs all the cryptocurrency trading platforms in Japan. Further, Japan legalized cryptocurrency in 2017 under the Payment Services Act.
Following the path of the USA, Canada to is quite positive towards crypto adoption. Crypto transactions are legal in Canada and are treated as a commodity, hence, classified as business income. Firms dealing with cryptocurrencies are supposed to register themselves with the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC).
In South Korea, crypto exchanges are legal but not cryptocurrencies. Cryptocurrency transactions are expected from taxes. However, the Ministry of Strategy and Finance has laid out its plan of imposing a tax on crypto transactions with a revised tax framework to be launched in 2022.
Mexico is a part of Latin America, which is the only country that has effectively levied cryptocurrency regulations. In 2018, the Mexican government published in the Mexican Official Federal Gazette, the Fintech Law that regulates the Financial Technology Institutions (IFTs). This new law was purely meant to regulate cryptocurrencies within the financial system of Mexico.
In Germany, cryptocurrencies come under The German Federal Financial Supervisory Authority (BaFin), which can be used for payment purposes. So for anyone who wishes to undertake crypto transactions should have approval from the body.
Malta is considered a leader in crypto regulation. Cryptocurrencies are not legal but crypto exchanges are. To develop existing AML/CTF legislation, Malta was the first to enact a trio of digital assets-related acts (MDIA, ITAS, and VFA), along with blockchain legislation. Landmark legislation, the cryptocurrency legislation is a new regulatory framework launched by the government in 2018 that regulates crypto exchanges. Further, the Malta Digital Innovation Authority was also set up that looks after crypto policy and ensures ethical use of crypto.
