How Are Cryptocurrency Regulations Being Implemented in Different Areas of the Globe?
Team Streams
August 18th, 2022
Team Streams
August 18th, 2022
Nothing strikes fear in the heart of an executive working in crypto quite like the onset of new regulations.
What was once the wild west and had almost no regulation, is now regulated in many countries around the world.
Successful crypto brands will be looking to market their exchanges, coins and other offerings internationally. But to do so you will need to know the regulations in the regions you want to expand into.
Here is a quick run-down of where crypto is regulated and what kinds of regulations you will run into in that region.
Is crypto legal tender: No
Cryptocurrency exchanges: Legal, registration requirements with FCA.
The UK left the EU in 2020, in that moment, it transposed the cryptocurrency regulation requirements laid out in the 5AMLD and 6AMLD into domestic law.
As such, exchanges in the UK need to register with the Financial Conduct Authority (FCA) and meet the AML/CFT reporting obligation.
The UK has no specific laws that address cryptocurrency and it is not considered legal tender. However, exchanges do have registration requirements. In the future, it is possible we will see more regulation although it is likely the UK will keep its regulations similar to those in the EU.
Is crypto legal tender: No
Cryptocurrency exchanges: Regulations being considered
In India, the status of cryptocurrency exchanges is a little grey. New regulations are a possibility and are currently being considered by the government. There is not a clear status on crypto as it relates to a taxable asset.
In February of this year, the government announced that it intends to place a 30% tax on any income generated from crypto transactions and an additional tax of 1% at source on all transactions (TDS).
However, this proposal has caused a lot of confusion around cryptocurrency and whether it is recognised as a legal asset and we will continue to watch how the Indian government's strategy to tax crypto unfolds.
Is crypto legal tender: No
Cryptocurrency exchanges: Legal, regulation varies by state
The US remains a complicated place when it comes to governance of any issue, crypto included. There is little or no consistency at the state level, however federal legislation is underway. Currently, cryptocurrencies are not considered to be legal tender but exchanges are considered money transmitters.
Earlier this year, the White House issued an Executive Order which stressed the importance of digital assets and a greater need for coordination and cooperation between government departments and regulators. We will likely see more regulations come into place in the future.
Is crypto legal tender: No
Cryptocurrency exchanges: Legal, registration with the Monetary Authority of Singapore required
Singapore has taken a friendlier position towards cryptocurrency than many of its neighbors. Cryptocurrency exchanges and trading are legal, however, crypto is considered to be an asset rather than legal tender. It is traded as “goods” rather than money and the Goods and Services Tax is applied.
In the future, we may see greater regulation in Singapore. In 2021, China started a major crackdown on crypto and many of its exchanges such as ByBit, Huobi, Cobo, and OKCoin, migrated to Singapore – along with their customers.
Is crypto legal tender: Legal and treated as property (not tender)
Cryptocurrency exchanges: Legal, must register with AUSTRAC
Australia is another Crypto-friendly country. In Australia, crypto is legal, treated as property and comes under Capital Gains Tax.
In 2018, the Australian Transaction Reports and Analysis Centre (AUSTRAC) announced that exchanges operating in Australia are required to register, identify and verify users, maintain records, and comply with government AML/CFT reporting obligations.
Last year, Australia announced plans to introduce a new licensing framework so we can expect greater regulation to come in the future.
Is crypto legal tender: Legal and treated as property (not tender)
Cryptocurrency Exchanges: Legal, must register with the Financial Services Agency
Japan is one of the most friendly countries when it comes to cryptocurrency and exchanges. There is a progressive climate for regulation and the government recognises digital currencies as legal property which come under the Payment Services Act (PSA).
In Japan, crypto exchanges are legal but there is a push for greater regulation. There have been a series of hacks over the past year which includes the infamous Coincheck hack of $530 million in digital currency. These attacks have shone a light on the need for regulation and security.
Countries around the world are all taking slightly different approaches to the regulation of crypto. These regulations are something that any exchange looking to operate in international markets needs to be aware of. While some countries like Japan and Singapore take a friendly attitude, there are some governments that want to crack-down
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