How Are Cryptocurrencies Regulated Around the World?
It’s time to take regulation into focus. The world of cryptocurrencies is developing exceptionally fast and we are excited by the opportunities that this brings along. However, it is important to reap the fruits of this innovation in a compliant way. We strongly believe in being fully regulated at CoinMetro and keeping our clients assets 100% safe.
Governments across the globe are well aware of the changing nature of the financial market and they have quite different views on how to respond on a regulatory level. Let’s take a look at some examples of the government rules and regulations on cryptocurrencies internationally.
Who Are Europe’s Most Crypto Friendly Governments?
Europe has shown great promise in governments avid to facilitate and regulate cryptocurrencies. Some of the most favorable crypto regulations of the region are in Switzerland. The country has been enthusiastic towards crypto from the very beginning and is currently offering numerous incentives to crypto currencies looking to set their activities up in Switzerland. This seems to be working – as the canton of Zug (known as the Crypto Valley) houses crypto and Blockchain businesses with a total worth of $44 billion. The area became leading in crypto after it passed several progressive laws on business activities relating to crypto.
Luxembourg has also taken a favorable stance in the crypto regulation topic –their financial regulators were one of the first to comment on cryptocurrencies in 2014. Crypto is treated as an intangible asset in Luxembourg, meaning that it is not subject to income tax until they are disposed of. And of course – we can’t forget about Malta when discussing crypto regulation in Europe. The tiny island nation has consciously taken the role of a crypto activist. Its regulations have somewhat followed. Malta’s prime minister called crypto “the inevitable future of money” and the parliament passed three bills creating a framework for Blockchain technology in 2018.
China – Opponent With a Hint of Newly Found Optimism
China is known as one of the crypto antagonists. Cryptocurrencies are prohibited in China – an umbrella ban was issued in 2018 on any crypto activities taking place in the country. Crypto exchange platforms, be it national or international, are not allowed to operate within the country and regulators have instructed financial institutions not to recognize digital currencies in retail payments. But it’s not all that gloomy – late October brought some hopeful news from the Chinese crypto-sphere. As president Xi Jinping announced that it is time to “seize the opportunities arising from the Blockchain technology”, the Chinese crypto sphere also became slightly more optimistic. Although the cryptocurrency trading ban stands, China passed a cryptography law that will start tackling regulatory challenges in commercial cryptography use-cases. The law will be effective on January 1, 2020.
Japan Leading the Way
Japan is a true gem in the world of cryptocurrency regulations. The country is years ahead on a legal and licensing level. Japan was the first to define Virtual Currency as a legal term and the country’s Financial Services Agency requires all crypto trading platforms operating in the country to be registered with them. Japan’s sophisticated regulation is a direct response to the infamous crypto crimes that took place in the country. Interestingly enough, the government saw these events as an opportunity to develop a stringent legal framework that can reduce the risk of fraud while still promoting business involving new technologies. South Korea has shown similar promise, as the government is planning to bring local crypto exchanges under a unified administrative umbrella.
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