Way before governments were involved, getting your head around cryptocurrency then wasn’t an easy feat. But now that policy makers and governments around the world are imposing new regulations on everything from cryptocurrency exchanges to ICOs, staying on track with what’s legal and what’s not has just become as frightening as figuring out which new token may become the next Bitcoin.
Rules on bitcoin, blockchain and cryptocurrency can vary significantly depending on the country as there is a lack of global coordination among governments worldwide. For now, there’s a wide range of opinions on the best way to regulate the industry. However, this may change after world leaders discuss this issue at the G20 summit which will be held in Buenos Aires this week.
Below is an overview on what some of the major countries are doing to regulate bitcoin and other cryptocurrencies.
ASIAN PACIFIC REGION
A huge part of the world’s cryptocurrency trading happens in Asia with Japan being the biggest and most dominant player after it introduced a licensing system for cryptocurrency exchanges last year.
Regulators in Hong Kong have adopted a more “hands-off” approach but at the same time they have sent out warnings for crypto platforms to cease any trading that is considered as a security without permission.
Singapore’s deputy prime minister, on the other hand, regards cryptocurrencies as “experiments” and added that he does not see any strong reason or case to ban trading. Taiwan’s officials are still observing the whole phenomenon whereas the Philippines intend to lay out rules for ICOs and the cryptocurrency industry by the end of the year.
China, which once led the global hub in cryptocurrency trading, is now the frontrunner in cracking it down. They started by outlawing cryptocurrency exchanges and ICOs, banned online access to overseas trading platforms and disconnected power to Bitcoin miners.
South Korea is also working on drafting a comprehensive set of rules and regulations on cryptocurrency. However, they have allowed exchanges to continue operations for now.
Majority of the cryptocurrency trading that’s happening in the U.S covers a legal gray area, a point which was later on emphasized by the testimony of the nation’s two top market watchdogs to Congress in February.
Nevertheless, the US SEC has been evaluating everything from ICOs to cryptocurrency, to hedge funds and trading venues. How they plan on cracking the cryptocurrency industry down still remains to be seen.
Canadian regulators have said that ICOs may be categorized as securities and that products associated to cryptocurrencies should be counted as high-risk.
In Brazil, market regulators have prohibited funds from investing in cryptocurrencies due to the fact that they are not classified as financial assets.
EUROPE, MIDDLE EAST and AFRICAN REGION
The European Commission is still investigating and reviewing the regulatory framework for cryptocurrencies in the region.
The European Securities and Markets Authority proposed some restrictions on products and services connected to digital currencies for retail investors. One regulation that is already in the works: platforms that exchange digital currencies for real, conventional money will have to verify their customer’s identities.
In Germany, crackdowns on trading venues that have no permission to offer brokerage services have already taken place. In France, authorities declared that online platforms for crypto-derivatives must face tougher standards for reporting and business conduct.
A parliamentary committee in the UK is looking into how to regulate and monitor digital currencies.
In Russia, the finance ministry has revealed, in January, a draft legislation that would ban cryptocurrency payments but allow ICOs and traditional forms of virtual currency exchanges.
Cryptocurrency regulation in major African economies is mostly a gray area.
In South Africa, market regulators do not supervise or regulate cryptocurrencies or crypto-exchanges.
In Zimbabwe and Kenya, financial authorities have warned people of the risks of “money-laundering, tax evasion, fraud and terrorism financing” that cryptocurrency may bring.
Cryptocurrency markets remain unregulated in Nigeria, but the central bank, which compared bitcoin trading to gambling, said this will probably change in the future.
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