The cryptocurrency market is constantly changing, and so does the approach of different governments toward these assets. Bitcoin continues to lead by valuation and market capitalization, which is why there is still a whole lot of interest from the wider public in it, especially where and how people today can use BTC without breaking the law.
This is where it gets confusing, because every nation has adopted a different approach toward Bitcoin. Let’s take a look at some examples.
Alt-text: Bitcoin golden token
In the US, regulatory differences can be spotted depending on the state in question. Bitcoin is still not considered legal tender, but crypto exchanges can operate as long as they receive a license. Nevertheless, federal cryptocurrency regulation is in progress and by fall 2022 the Treasury aims for tougher rules for collecting data related to all transactions involving crypto.
More specifically, exchanges will be required to submit suspicious activity reports for transactions over $10,000 and wallet owners will be required to identify themselves when sending more than $3,000 in a single transaction. According to UniGlobal Assets, a growing brokerage that offers crypto trading services, this rule might not actually be implemented by the deadline of the Treasury, given the upcoming midterm elections.
Similarly, European countries embrace Bitcoin and other cryptocurrencies as means of transmitting money. There are some places, like Malta, where the law is very crypto-friendly, but in most countries, crypto exchanges need to get a license, while users are required to provide personal data in order to use cryptocurrencies.
Alt-text: Bitcoin online trading
At the same time, any sort of income generated by investing in or trading Bitcoin must be declared and taxed. People today are increasingly seeing crypto as an opportunity to diversify their trading portfolio, thanks to trading brands such as UniGlobal Assets, which now cover BTC, as well as other tokens.
Things in China are not changing for the better when it comes to how the government sees Bitcoin. The country banned crypto exchanges a few years ago, and the pressure on the industry from authorities is just getting tighter.
Many crypto-related companies were forced to move operations abroad, as banks were not allowing customers to get involved in crypto-related transactions. Now that there is a digital Yuan project operating, hopes for a positive change with regard to decentralized money are still very low.
Not all Asian countries share this view on Bitcoin and a great example is Japan. In December 2017, BTC and other digital tokens were recognized as legal property under the Payment Services Act (PSA). Also, the National Tax Agency ruled crypto-related gains as miscellaneous income and investors were taxed accordingly.
Recently, some amendments to the PSA and FIEA (Financial Instruments and Exchange Act) were announced, introducing terms such as “crypto-assets”, placing greater restrictions on managing users’ virtual money, and easing regulation for derivatives trading.
Basically, crypto custody services are brought under the scope of PSA, while derivatives trading is under the scope of FIEA. All in all, Japan’s friendly approach toward cryptocurrency has not changed and it is bound to remain the same in the near term horizon.