Home Money & FinanceCryptocurrency Who and Why Wants to Regulate Cryptocurrencies?

Who and Why Wants to Regulate Cryptocurrencies?

by Olufisayo
Cryptocurrencies Regulation

Cryptoсurrencies are not limited to the usual borders of countries – they are available to all, and this is their undoubted advantage. At the same time, cryptocurrencies come to the direct function of banks, so many financial institutions are supporters of state regulations.

The truth is that no state can confidently support a universal currency, which is not subject to control, but many are trying. Let us deal with it.

World experience

In most countries, there is either no or no control at all, but it is minimal and not always consistent. Some believe that it is impossible to control the turnover, others, on the contrary, that it will take time, but an effective way of regulation will certainly be found.

Many banks, however, borrow block technology for their own developments to simplify transactions and security of savings.

The U.S. domestic tax service has decided to tax profits from the sale of cryptocurrency currency by analogy with the sale of capital assets. The amount of tax varies with the sale of short-term (15%) or long-term assets (20%). In the second case, the cryptocurrency must have been owned for more than 12 months.

       

But the authorities can only rely on the integrity of citizens, who should voluntarily specify bitcoins among their assets when filling out tax forms.

In September 2015, the state of New York adopted a “bitlicense” – now a number of operations with cryptocurrency is considered a business, so a license is required for legal operation. This led to the closure of at least 10 companies dealing with bitcoins in the state. As of January 2017, only four major companies – Circle, Ripple, Coinbase, and Japanese bitFlyer – have been licensed.

Bolivia, Ecuador, Kyrgyzstan, Bangladesh, and Nepal have declared cryptocurrency illegal on their territories.

In April 2017 in Japan, the cryptocurrency officially received the status of payment means. However, it took another six months to develop special conditions to prevent fraud and artificial manipulation with the courses of cryptocurrency.

In most European countries, cryptocurrencies are not prohibited but are considered not as currencies, but as assets. Often governments make new regulations and try to manage the rate themselves.

       

At the end of 2017, Belarus officially legalized all cryptocurrencies and operations with them, including legally allowed mining. Under the law, actions related to cryptocurrencies are not entrepreneurial, and tokens themselves are not subject to declaration. The decree is valid until 2023. The country’s leadership believes that during this time Belarus will become a “regional center of competence in this field”.

A similar proposal was submitted to the Verkhovna Rada in late 2017. In this case, they want to consider the crypt currency as an object of ownership, which is more effective for both the state and users. Meanwhile, the National Police considers it necessary to prohibit cryptocurrencies in Ukraine, because “they are dangerous for citizens.

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1 comment

5 Ways to Protect Yourself When Using Cryptocurrency February 15, 2021 - 6:38 PM

[…] as the space is stil relatively new, it is mostly unregulated. When you couple that with the relative complexity of the services, you can see why the “crypto […]

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