This Is How Cryptocurrency Is Regulated Across The World Governments across the world are divided on the decisions related to cryptocurrency
By S Shanthi
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The Reserve Bank of India (RBI) and the central government seem to be on a different page when it comes to cryptocurrency. While the Indian government is planning to table a comprehensive bill on cryptocurrency in the upcoming winter session of Parliament, RBI governor Shaktikanta Das has said there are far deeper issues involved. "When the central bank says that we have serious concerns from the point of view of macroeconomic and financial stability, there are far deeper issues involved," the governor said at the State Bank of India's Economics Conclave.
In a meeting conducted by a Parliamentary Standing Committee on Finance with cryptocurrency experts and industry associations, there was a consensus that digital currency can't be stopped but should be regulated. However, RBI has been strongly reiterating its views against cryptocurrencies that the altcoins pose serious threats to the financial stability of the country.
According to the latest news report on the development, cryptocurrencies may not be permitted as currency to settle transactions and make payments but could be held as an asset like shares, gold or bonds. However, there is no confirmation on the same. And, as the discussions on cryptocurrency legalization and regulation go on, here is a look at how other countries are regulating the digital asset.
United States
Though the US has been in support of allowing all cryptocurrency activities, regulations differ from state to state. For instance, New York launched a framework for licensing cryptocurrency businesses and exchanges, called BitLicense in 2016. In this, companies that are looking to transmit, hold, buy or sell cryptocurrencies have to take a license from the New York State Department of Financial Services. Wyoming also has a positive approach. Overall, crypto exchanges in the US fall under the regulatory scope of the Bank Secrecy Act. They should register with the Financial Crimes Enforcement Network (FinCEN).
Canada
In February 2021, Canada was the first country to approve a Bitcoin exchange-traded fund (ETF). Crypto transactions are legal in Canada. They are considered a business income. Firms dealing with cryptocurrencies are classified as money service businesses and they have to register themselves with the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC).
China
The Chinese government has declared all cryptocurrency transactions illegal. It has also stopped allowing citizens from working for crypto-related companies. Ironically, cryptocurrencies first appeared in China around 2008. However, since 2016, China has stepped up its regulations. This year, the People's Bank of China, announced that cryptocurrencies lack the status of other monetary instruments. It declared that all related business will be considered illegal. It also warned that crypto transactions originating outside China will also be treated as crimes.
The European Union
Unlike China, throughout most of the European Union (EU), cryptocurrency is legal. The exchange governance and taxation, however, changes within the country. The taxation ranges between 0 to 50 per cent. In September 2020, the European Commission also proposed a framework, called the Markets in Crypto-Assets Regulation (MiCA), to increase protection for consumers, establish conduct, launch new licensing requirements, among others.
Australia
Cryptocurrency exchanges have been legalized in Australia. Thus, it is subjected to Capital Gains Tax. Further, cryptocurrency comes within the realms of Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF 2006) and associated rules. In 2018, new regulations were put in place by the Australian Transaction Reports and Analysis Centre (AUSTRAC). According to this, crypto exchanges will be registered with AUSTRAC, in compliance with the AML/CTF 2006 Part 6A, Digital Currency Exchange Register.
Singapore
In Singapore, cryptocurrency is considered property but not legal tender. The Monetary Authority of Singapore (MAS) licenses and regulates exchanges. Additionally, the Blockchain and Cryptocurrency Regulation, 2020 was signed to regulate cryptocurrency. This was also meant to increase its adoption.
