Evolutionary Regulations of Cryptocurrency

The Internet has revolutionized the world we live in — giving rise to many aspects of the subject. Cryptocurrency is one of its very own blooming buds in the world of technology and commerce.
Cryptocurrency became ever-present and it is functioned globally, with yet not having a legal or regulatory framework mutually across on international trade. The law and regulation of cryptocurrencies differ globally to their country. Approximately 2,957 currencies are being traded with a total market capitalization of $221bn as of October 8th, 2019 (stated by Yahoo Finance).
However, the creator of Bitcoin system, Satoshi Nakamoto, argues that “cryptocurrency was created to achieve monetary freedom, to promote decentralized of commercial transactions, in simple terms, to let sellers and buyers or participants carry out transactions independently with security and fast pace.”
In 2017’s crypto market rally drew the attention of many governments as Bitcoin hit highs and the crypto market topped $800 billion in trading volume, of which, many governments welcomed the technology and many were against while also few ignored its existence. But like every other entity, cryptocurrency has its benefits and drawbacks or misuses which lead to forming regulations on cryptocurrency.
Here are few countries with its regulations stated:
USA: Cryptocurrency has made a legitimate presence in the U.S. market. The laws governing exchanges vary by state, so it becomes hard to find a consistent approach. The U.S. Department has defined Bitcoin, not as a currency but a money services business (MSB), however, U.S. regulators are still assessing their options. Bitcoin has also been categorized by the Internal Revenue System (IRS) as property for taxation purposes.
Canada: Canada is also a part of the usage of cryptocurrency. The Canada Revenue Agency has characterized cryptocurrency as a commodity and not a government-issued currency. Hence the use of cryptocurrency to pay for goods and services is treated as a barter transaction. Canada’s tax laws and rules are also applied to digital currency transactions including those made with cryptocurrencies and digital currencies are subject to the Income Tax.
European Union: The European Court Justice stated with its decision that transactions to exchange traditional currency for virtual currencies and vice versa constitute the supply of services for consideration but fall under the exemption from value-added tax (VAT). Therefore, buying and selling are exempted from VAT in all EU Member States. The President of the European Central Bank, Mario Draghi, stated that bitcoin and other digital currencies are very risky assets due to their high volatility and speculative prices. He stated that digital currencies are not subject to a specific supervisory approach, but that work is underway in the single supervisory mechanism to identify the potential prudential risks that the digital assets could pose to supervised institutions.
Switzerland: Switzerland has been considered as the leader in cryptocurrency. Switzerland states cryptocurrencies to be treated as assets. The Swiss Financial Market Supervisory Authority has published a set of guidelines on the regulatory treatment for ICOs. FINMA differentiates between payment tokens (cryptocurrencies), utility tokens and asset tokens. Operators of financial market infrastructure are subject to authorization by FINMA. Cryptocurrencies in Switzerland are treated like foreign currencies for tax purposes and are subject to wealth tax. Last year, the Swiss State Secretariat for International Finance reported that it would set up a working group on ICOs and Blockchain.
Countries that have banned or are not in favor of cryptocurrency:
Many countries have not been in favor of the cryptocurrency concept and have been regulating various activities to reduce the usage and banning of cryptocurrency.
The countries that are against cryptocurrency are China, Taiwan, Colombia, Algeria, Bolivia, Morocco, Nepal, Pakistan, and Vietnam.
Cryptocurrency is a matter of risk and keeps changing which varies regulations and its theory. Yet cryptocurrency is the next ultimate thing. With works, it can create boon and havoc in the market.
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