Are cryptocurrencies favored in various countries around the world?
With the winter session of Parliament starting on November 29, the cryptocurrency bill is expected to be introduced this time around, as India moves towards regulating cryptocurrencies. Globally, different countries have reacted differently to cryptocurrencies, with some allowing them in a regulated manner and others banning them altogether.
The global cryptocurrency user base grew 190% between 2018 and 2020 (now estimated at 150 to 200 million), according to a policy research report released by the Smahi Foundation, a nonprofit based in Bengaluru.
Here is a list of countries that have a favorable approach towards cryptocurrencies and those that are close to the idea.
Countries with a pro-crypto approach
El Salvador: This Central American country became the first to make Bitcoin legal tender on June 9, 2021. Although the US dollar continues to be El Salvador’s primary currency, cryptocurrencies can also be used for all financial transactions. Recently Salvadoran President Nayib Bukele announced that his government would build an oceanfront “Bitcoin town” at the base of a volcano.
United States and Canada: The United States does not ban the use of cryptocurrencies, but there are regulatory regimes for these digital coins that vary from state to state. New York and Wyoming have specific regimes for cryptos. In 2016, New York launched a licensing framework called “BitLicense” for businesses and crypto exchanges, according to the Smahi Foundation report.
Recently, banking regulators in the United States announced a plan to clarify the rules and regulations regarding how banks can use cryptocurrencies, the IANS news agency reported.
Canada has also approved the use of cryptocurrencies. The Canada Revenue Authority (CRA) generally treats cryptocurrency as a commodity for income tax purposes, according to a Reuters report.
UK, EU and Australia: There is no ban or existing law for cryptocurrencies in European Union (EU) countries. Even in Australia, there is no specific law for crypto except for some tax changes. But there are laws for some businesses that must register and implement KYC policies, report suspicious transactions, and comply with anti-money laundering (AML) legislation.
The UK does not have a major ban on cryptocurrency, but certain financial standards apply to crypto-related activity. However, the UK task force has said it will soon impose strict KYC / AML standards for crypto assets.
Japan, Malta and Singapore: Japan, Malta and Singapore do not ban cryptocurrency. However, in Japan crypto exchanges are specifically regulated by the Payment Services Act, while Malta is governed by three laws: the Malta Digital Innovation Authority Bill, the Malta Digital Innovation Authority Bill, the technological arrangements and services and the bill on virtual financial assets, according to the Smahi Foundation report.
The Monetary Authority of Singapore (MAS) and the Payment Services Act of 2019 regulate traditional and cryptocurrency payments and exchanges in Singapore, according to a Reuters report.
Countries with an anti-crypto approach
China: The country has banned regulated financial institutions from dealing in crypto assets or facilitating transactions in crypto assets. Chinese banks banned the use of digital currencies in 2013 and tightened their regulations after 2016. On September 24, 2021, China announced a ban on all cryptocurrency transactions and crypto mining, according to china .usc.edu, a United States-based research company. .
The report adds that the decision was made in favor of reducing energy prices and greenhouse fuel emissions associated with crypto transactions.
Russia: Russia banned cryptocurrencies in September 2017. Russian President Vladimir Putin has repeatedly linked cryptocurrency to criminal activity, calling for more attention to cross-border crypto transactions in particular, according to Euro news.
However, Russia may reconsider cryptocurrency trading in the near future, according to some media reports.
Turkey: On April 16, 2021, the Central Bank of the Republic of Turkey issued a regulation prohibiting the use of cryptocurrencies, including Bitcoin, directly or indirectly, to pay for goods and services claiming that it causes “irreparable damage. And that there are significant risks. involved in such transactions, Reuters reported.
Bangladesh: On December 24, 2017, Bangladesh banned cryptocurrencies, claiming it went against their country’s financial regulations (Money Laundering Prevention Act). In addition, crypto traders in Bangladesh may face years of imprisonment in the Asian nation.
Others: Apart from these, countries including Nepal, Qatar, Ecuador, Vietnam, Morocco and Bolivia have also banned cryptocurrencies.
It remains to be seen what the way forward for cryptocurrencies in India is.