The extent to which a government is crypto-friendly is based on two criteria: the first one is how it regulates the cryptocurrency, and the next is how it regulates the money. Cryptos are a newish concept in the Indian market, and it indicates that the current regime has yet to regulate their taxability.
While some countries have started to regulate cryptocurrency like Portugal, Germany, Switzerland, Malta, Cyprus, Bermuda, and Singapore, continue to stay crypto-friendly.
The United States of America
From 2013, the Financial Crimes Enforcement Network (FinCEN) of the United States Department of The treasury has announced Bitcoin guidance. Bitcoin is defined by the Treasury as a transferable currency having a real-world representation or one that often included a substitute for actual currency.
A financial service business can be defined as any company that maintains or exchanges Bitcoin, such as cryptocurrency exchanges and payment systems (MSB). As a consequence, an MSB is subject to the Banking Act and should register with the United States Treasury and file statements on dealings over $10,000, including bitcoin transactions.
FinCEN is also focusing on regulations for financial as well as non institutions to establish key objectives for bitcoin tracking and reporting.
These guidelines will compel these companies to disclose specific transactions and possible suspects, such as financial institutions and digital currencies. They will be able to examine potential financial crimes and illicit activities involving cryptocurrency thanks to this disclosure.
The European Union
Bitcoin and other cryptocurrencies are categorised as crypto-assets by the European Union. But it is not illegal to use Bitcoin in the EU, the European Banking Authority, the union’s financial watchdog, has stated that crypto-asset activities are just beyond its power and continues to alert the public and organisations about the risks of bitcoin.
The European Commission finalised a recommendation for laws to regulate crypto-assets in 2020, which was endorsed by various Eu institutions. This Legislation seeks to prevent duplication of financial legal regimes and to equalise the financial level of competition across the EU. The panel also wants to ensure that the general public has access to crypto and will use it securely.
Canada
Canada, like its southern neighbour, the United States, takes a largely pro-bitcoin approach. For revenue purposes, the Canada Revenue Agency (CRA) deems bitcoin to be a service. This means that any profit made from a Bitcoin exchange is regarded commercial gain or a capital growth, and must be declared as such.
Canada considers cryptocurrency exchanges to be money service businesses. This brings them under the purview of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada’s version of AML/CFT laws). As a result, cryptocurrency exchanges need to register with the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC), report any suspicious transactions, abide by the compliance plans, and even keep certain records.
Australia
The Australian Taxation Department, like the Canadian Taxation Branch, sees Bitcoin as a financial asset with value that can be charged when certain events occur. A capital gain is imposed if you trade, exchange, sell, give, transfer to fiat cash, or use Bitcoin for transactions. For tax reasons, you’ll also have to keep a record of any Bitcoin exchanges you make.
El Salvador
El Salvador is the only nation in the world where bitcoin has been declared legal tender. The country’s Congress accepted President Nayib Bukele’s proposal to formally adopt bitcoin as a payment option in June 2021.
Other Countries Where Bitcoin Is Legal
Many nations allow usage of Bitcoin as a mode of transaction and develop a law. Few examples are as follows:
- Denmark
- France
- Germany
- Iceland
- Japan
- Mexico
- Spain
- United Kingdom
Countries Where Bitcoin Is Illegal
While Bitcoin is accepted in many parts of the world, its instability and decentralised nature have caused concern in other nations. Some see it as a danger to their present monetary systems, while others fear it will be used to fund illicit practices such as drug dealing, financial fraud, and terrorism. Several nations have openly banned the use of cryptocurrency, while others have aimed to remove any financial and banking system support needed for its exchange and use.
Countries With Implicit Bans
Through its November 2021 update, the Library of Congress found 42 countries that had implicit bans on certain crypto usage. The foregoing are a few of the listed countries:
- Bahrain
- Burundi
- Cameroon
- Central African Republic
- Gabon
- Georgia
- Guyana
- Kuwait
- Lesotho
- Libya
- Macao
- Maldives
- Vietnam
- Zimbabwe
Countries With Absolute Bans
In November 2021, the Library of Congress recognized nine countries that had explicit prohibitions on cryptos:
- Algeria
- Bangladesh
- China
- Egypt
- Iraq
- Morocco
- Nepal
- Qatar
- Tunisia
Before you deal in cryptocurrencies, make sure you’re well aware of all the laws and risks. With Cryptoshrypto in this segment, I hope you do understand about laws and implication of cryptocurrency all around the world.
