Cryptocurrency is undoubtedly changing the world as we know it. For starters, it is entirely decentralized, which means that there is no central authority controlling it. This decentralization also makes it much more secure than traditional fiat currencies. In addition, cryptocurrency transactions are usually faster and cheaper than conventional bank transfers.
Another way that cryptocurrency is changing the world is through blockchain technology. Blockchain is a distributed ledger system that allows secure, transparent, and tamper-proof transactions. This could potentially revolutionize many industries beyond just finance, including supply chain management and voting systems.
Of course, cryptocurrency is still in its early stages and has a long way before it becomes truly mainstream. But it’s one of the hottest pies right now in the investment market. However, the cryptocurrency market is still relatively new, and different countries have taken different stances in regulating it. Here are five other laws regarding cryptocurrency and what they could mean for your investment.
The United States
The United States is still in a love-and-hate relationship with cryptocurrency. Some investors think it’s the future of the free market, while others believe is it’s downfall. Regardless of what investors think, cryptocurrency is slowly creeping into the country’s economy, which means that regulations must be implemented. Cryptocurrencies are considered commodities in the country and subject to capital gains tax. This means that if you sell your cryptocurrency for more than you bought it for, you will owe taxes on the profit. The Internal Revenue Service has also said that they may treat cryptocurrencies as property for other tax purposes.
This is generally seen as a positive development, as it gives some legitimacy to cryptocurrencies and provides clarity on how they will be taxed. However, it also means that cryptocurrency investors will have to keep track of their profits and losses to file their taxes properly. In addition, many thought it would follow a forex market structure, considering that it’s a currency, but that isn’t the case. Currently, there are rumors that it would become part of trade securities to make trade transactions using crypto much easier to monitor.
The European Union
The European Union has taken a more hands-off approach to regulate cryptocurrency. There are no specific laws regarding cryptocurrency, but the European Central Bank has cautioned against investing in it. In addition, some individual countries within the EU have started to crack down on cryptocurrency exchanges.
For example, in January 2018, Bulgaria’s financial regulator announced that it was freezing the accounts of two major cryptocurrency exchanges. This was done to prevent money laundering and terrorist financing. It’s likely that we will see more of these crackdowns in the future as countries attempt to get a handle on this new and largely unregulated industry.
China
China has had a tumultuous relationship with cryptocurrency. In September 2017, the country outlawed initial coin offerings and exchanges. This caused a massive sell-off in the market, as many investors were forced to sell their holdings.
However, China has not entirely banned cryptocurrency. In fact, the country is home to some of the largest Bitcoin miners in the world. Despite the government’s crackdown, China is also home to many cryptocurrency startups.
China will likely continue to crack down on cryptocurrency in the future. However, it’s also likely that the country will remain a significant player due to its large population and booming economy.
Japan
Japan has been one of the most welcoming countries regarding cryptocurrency. In April 2017, Japan officially recognized Bitcoin as a legal form of payment. This was a huge step forward for the cryptocurrency industry, as it legitimized Bitcoin and paved the way for other countries to follow suit.
In addition, Japan has also created a favorable environment for cryptocurrency exchanges. For example, Japanese exchanges are not required to get a license to operate. This has led to a boom in the number of exchanges in the country, as well as a boom in cryptocurrency trading.
However, Japan has also taken steps to crack down on anonymous trading. In March 2018, the country’s financial regulator announced that it required all cryptocurrency exchanges to verify the identity of their customers. This is a major blow to privacy-focused coins like Monero and Zcash, which are designed to be untraceable. Surprisingly enough, despite being legal in the country, Japan isn’t using cryptocurrency as much as the next country on this list.
Vietnam
Vietnam is a country that uses cryptocurrency the most when compared to the whole world. The government has taken a very open approach to cryptocurrency and announced plans to launch its national cryptocurrency.
In addition, Vietnam is home to several cryptocurrency exchanges, despite the fact that trading is currently illegal in the country. This is likely because Vietnam’s currency, the Dong, is not very stable. As a result, many people have turned to cryptocurrency to store their wealth.
However, in recent months, the government has been cracking down on cryptocurrency trading. In January 2018, the country’s central bank announced that it was banning all forms of a cryptocurrency payment. This ban is currently still in effect, but it will likely be lifted in the future.
Cryptocurrency is a largely unregulated industry at the moment. This means that there is a lot of uncertainty regarding investing in cryptocurrency. Some countries have taken a more open approach to cryptocurrency, while others have cracked down. It’s likely that we will see more regulation as governments attempt to get a handle.
