International Cryptocurrency Regulations? How Crypto Is Regulated In Different Countries

Do you know that the use of cryptocurrencies and the rules that control them are increasing around the world? The crypto ecosystem is continually evolving, and keeping up with the rules in several world jurisdictions is difficult. This manual has provided you with all you need to know about international cryptocurrency regulation. How to manage the wide range of global legislative attitudes towards digital currencies. The aspects linked to them. The regulation in various countries on coins and barter vary. Regulation of cryptocurrency in the near future. The countries that accept them as legal tender.

India

Cryptocurrencies: Unlawful

Regulating debate allows the bartering of cryptocurrencies.

In India, new legislation for legal tender explored in India, and the status of exchanges is unclear. Although the tax status of cryptocurrencies is still unclear. Finance minister Bhagwat Karad stated in February 2022 that bitcoin transactions could be subject to a 30% tax.

Barter

India’s cryptocurrency restrictions are becoming more stringent. The Reserve Bank of India (RBI) outlawed “dealing with or settling virtual currency” for banks and other regulated financial organizations in 2018. The broad rule outlawed cryptocurrency trading on domestic exchanges and pushed existing exchanges to shut down. The country’s Supreme Court, in a major ruling in 2020, deemed the ban illegal and yielded, enabling exchanges to resume.

Regulations to Come

A leaked draft bill from 2019 revealed a broad ban on cryptocurrencies with an exception for a proposed official digital currency. Individuals who “mine, keep, sell, deal in, transfer, or utilize cryptocurrencies in the country of India” might face punishments, according to the bill.

despite the fact that the draft bill never made it to the floor of parliament. The Indian Minister of State for Finance hinted at the introduction of a new cryptocurrency bill, dubbed the Cryptocurrency. And Regulation of Official Digital Currency Bill. While the Indian government has stated its opposition to private cryptocurrencies. The Standing Committee on Finance met with officials from cryptocurrency exchanges in November 2021 and came to the decision that cryptocurrencies should be regulated rather than prohibited.


United Kingdom

Cryptocurrencies: not considered legal tender.

Bartering of Cryptocurrency: Legal, registration requirements with FCA

The United Kingdom’s approach to cryptocurrency regulations was estimated. Although the UK has no specific cryptocurrency laws, cryptocurrencies are not considered legal tender, and exchanges have registration requirements. HMRC has issued a brief on the tax treatment of cryptocurrencies, stating that their ‘unique identity means they can’t be compared to conventional investments or payments, and their ‘taxability’ depends on the activities and parties involved. Gains or losses on cryptocurrencies are, however, subject to capital gains tax.

Barter

In order to operate in the United Kingdom, cryptocurrency exchanges must register with the Financial Conduct Authority (FCA). And comply with AML/CFT reporting requirements. The Money Laundering, Terrorist Financing, and Transfer of Funds (Information on the Payer) Regulations 2017 apply to exchanges. Amendments to such regulations took effect in January 2020, and they now include the most recent FATF principles. 

Regulations to Come

In the short term, the UK’s cryptocurrency regulations are anticipated to remain substantially consistent with those of the EU, although they will differ to some extent in the future. The UK’s intention to consult on putting certain cryptocurrencies inside the scope of ‘financial promotional legislation’ and to continue to consider a ‘broader regulatory approach’ to crypto-assets was stressed in HM Treasury recommendations issued in 2021. The government announced proposals for legislation in January 2022 to address “misleading crypto-asset promotions,” with the goal of bringing cryptocurrency advertisements “into line with mainstream financial marketing.” 


South Korea

Cryptocurrencies: Not legal tender

Bartering of Cryptocurrency: Legal, must register with FSS

Cryptocurrencies are not regarded as legal cash in South Korea, and exchanges, while lawful, are governed by a strict regulatory structure. In South Korea, cryptocurrency taxes are a grey area because they are neither a currency nor a financial asset. Therefore, cryptocurrency transactions are now tax-free. The Ministry of Strategy and Finance, on the other hand, has stated that it is considering placing a tax on crypto transaction revenues and plans to publish a taxation framework in 2022.

Barter

South Korean cryptocurrency exchange rules are stringent, including government registration and other procedures regulated by the Financial Supervisory Service of South Korea (FSS). In 2017, the South Korean government forbade the use of anonymous accounts in cryptocurrency trading and barred local financial institutions from hosting Bitcoin futures contracts, despite rumors of a ban. Similarly, the Financial Services Commission (FSC) places tight reporting requirements on banks holding crypto exchange assets.

All South Korean exchanges must comply with AML/CFT requirements and acquire an operating license from the Financial Services Commission’s Financial Intelligence Unit. In 2021, the FIU will delist all privacy coins from South Korean exchanges, (effectively banning the trade of the tokens).

Regulations to Come

South Korea’s proposed cryptocurrency tax was supposed to go into effect in January 2022, but it was postponed until January 2023. Apart from the tax structure, South Korea has stated that it will endeavor to align the industry with FATF anti-money laundering laws.

Japan

Cryptocurrencies: Legal, treated as property

Cryptocurrency Exchanges: Legal, must register with the Financial Services Agency

The Payment Services Act recognizes Bitcoin and other digital currencies as legal property in Japan, which presently boasts the world’s most progressive regulatory climate for cryptocurrencies (PSA). The National Tax Agency decided in December 2017 that cryptocurrency gains should be classified as “income from other sources” and investors must be taxed.

The PSA and the Financial Instruments and Exchange Act (FIEA), which took effect in May 2020, are among the most recent rules. The modifications changed the word “virtual currency” to “crypto-asset,” added further limits on handling users’ virtual money, and made crypto futures trading easier to regulate. The new laws bring bitcoin custody service providers (who do not sell or buy crypto assets) under the PSA, while cryptocurrency derivatives enterprises fall under the FIEA.

Barter

Cryptocurrency exchanges must register with the Financial Services Authority (FSA) in order to operate. Custodian services providers will be added to the registration requirement in mid-2019. The PSA also imposes stronger AML/CFT and cybersecurity standards.

Japan formed the Japan STO Association and the Japanese Virtual Currency Exchange Association (JVCEA) in 2020. The JVCEA is made up of all exchanges, whereas the Japan STO Association is made up of five prominent Japanese financial organizations. Both regulators endeavor to provide guidance and promote compliance with unregulated exchanges.

Regulations to Come

Although Japan maintains a welcoming environment for cryptocurrencies, mounting AML worries are prompting the FSA to consider additional regulations. The FSA said in December 2021 that it would propose legislation in 2022 to regulate stable coin issuers in order to manage customer concerns and prohibit the use of stable coin tokens for money laundering. New security protocols and duties for crypto service providers to report suspicious activity are likely to be included in the law.

Canada

Cryptocurrencies are not considered legal tender.

Bartering of cryptocurrency is legal, but you must enroll with FinTRAC.

Although cryptocurrency is not legal tender in Canada. But can be used to purchase goods and services. Canada has taken a calculated approach to digital currencies, regulating them mostly through regional securities legislation. Cryptocurrencies have been taxed by the Canada Revenue Agency since 2013, and they are subject to Canadian tax legislation.

Barter

Exchanges in Canada are now largely regulated in the same way as financial services organizations, with the same due diligence and reporting requirements, thanks to a 2019 modification to the PCMLTFA. The Virtual Cash Travel Policy took effect in Canada in February 2020, mandating all financial institutions and money services firms (MSBs) to maintain track of all cross-border cryptocurrency marketings.

The Canadian Securities Administrators (CSA) issued recommendations for cryptocurrency issuers that possess or hold crypto assets in 2021. The guideline outlined regulatory requirements for crypto producers’ statements on how they secure their assets from theft and misuse, as well as the necessity to communicate relevant factors. Likewise, in 2021, additional revisions to the PCMLTFA mandated that cryptocurrency exchanges register with FinTRAC (Financial Transactions and Reports Analysis Centre of Canada).

Regulations to Come

Since regulations are continually changing, there are no indications that major new legislation is on the way. Before adopting more laws, we believe the Canadian government and crypto markets will need time to assess how recent reforms have impacted the crypto sector.

Luxembourg

Cryptocurrencies are not considered legal tender.

Bartering of Cryptocurrency is legal, but they must enroll with CSSF

Although Luxembourg has no official cryptocurrency rules, the government’s legislative approach to cryptocurrencies is largely supportive. Cryptocurrencies should be “accepted as a means of payment for goods and services” in Luxembourg, according to Finance Minister Pierre Gramegna, despite the fact that they are not legal tender. Authorities published guidance on the tax treatment of cryptocurrencies in 2018, which varies depending on the type of exchange.

In early 2019, Luxembourg implemented laws that gave blockchain transactions the same legal status as transactions made with traditional methods. The CSSF has recognized the financial benefits of blockchain technology, and Pierre Gramegna has spoken of the “added value and efficient services” of cryptocurrencies.

Barter

Cryptocurrency exchanges in Luxembourg are regulated by the CSSF. New coin firms must first get a financial institution license before they can begin trading. Under Luxembourg’s “electronic money” regulations, the licenses impose AML/CFT monitoring obligations. Bitstamp acquired the first crypto license in 2016.

Regulations to Come

No certain legislative actions are planned, we anticipate further crypto legislation in Luxembourg, particularly now that the EU’s 5AMLD and 6AMLD are in place.

Gibraltar

Cryptocurrencies are not considered legal tender.

Bartering of cryptocurrency is legal, but they must enroll with GFSC.

Gibraltar is a leading nation in the regulation of cryptocurrencies. In the state, bitcoin is not regarded as legal tender, although digital currencies are lawful and function under a very well regulatory system. Gibraltar has the distinction of being a low-tax jurisdiction: cryptocurrencies are exempt from capital gains and dividend taxes, and cryptocurrency transactions are subject to a business-friendly 12.5 percent corporate tax rate.

Barter

After considerable consultation with the crypto industry, Gibraltar developed its Digital Ledger Technology (DLT) Regulatory Framework in 2018. Exchanges must register with the Gibraltar Financial Services Commission (GFSC) and demonstrate that they are adhering to the DLT framework’s “principles,” which include a significant focus on money laundering and terrorism funding detection and disclosure. Gibraltar’s DLT framework legislation was revised in September 2020 to better conform with FATF recommendations, taking into account the greater risk concerns connected with some virtual asset types.

Regulations to Come

Gibraltar’s government is looking into more cryptocurrency regulation in order to boost its global leadership. The GFSC expressed an opinion in 2017 regarding the uncontrolled usage of ICOs, indicating that it will continue to monitor their use in the DLT Guidelines. Likewise, the authority’s Invent and Build Team was formed to assist entrepreneurs in developing new crypto-economy goods. In 2021, Gibraltar established a Market Integrity Working Group to further define acceptable market rules for cryptocurrency exchanges in collaboration with norms established by other jurisdictions such as the United Kingdom and the European Union.

United States

Cryptocurrencies: Not considered legal tender

Bartering of Cryptocurrency: Legal, regulation varies by state

While finding a consistent legal approach at the state level is difficult, the United States is making headway in drafting federal cryptocurrency legislation. Cryptocurrencies are not considered legal tender by the Financial Crimes Enforcement Network (FinCEN), but cryptocurrency exchanges are considered money transmitters since cryptocurrency tokens are “other value that substitutes for cash.” The Internal Revenue Service (IRS) does not consider cryptocurrencies to be legal cash, but it has released tax guidance that defines it as “a digital representation of value that operates as a medium of exchange, a unit of account, and/or a store of value.”

Barter

In the United States, cryptocurrency exchanges are lawful and regulated under the Bank Secrecy Act (BSA). In reality, this means that bitcoin exchange service providers must register with FinCEN, establish an anti-money laundering/counter-terrorist financing program, keep proper records, and submit reports to the authorities. Meanwhile, the US Securities and Exchange Commission (SEC) has stated that cryptocurrencies are securities and that securities regulations apply to digital wallets and exchanges in their entirety. The Commodities Futures Trading Commission (CFTC), on the other hand, has taken a more approachable “do no harm” stance, defining Bitcoin as a commodity and allowing bitcoin futures to trade openly.

Regulations to Come

Crypto laws are urgently needed, according to the US Treasury, to combat global and domestic criminal activity. FinCEN suggested new cryptocurrency legislation in December 2020, requiring bitcoin exchanges and wallets to collect data. The rule would require exchanges to file suspicious activity reports (SAR) for transactions over $10,000 and wallet owners to identify themselves when sending more than $3,000 in a single transaction, and it would go into effect in the fall of 2022.

Under new regulations, cryptocurrency exchanges are now deemed brokers and must comply with AML/CFT reporting and record-keeping obligations. The Justice Department is continuing to work on future cryptocurrency rules with the Securities and Exchange Commission and the Commodity Futures Trading Commission.

Switzerland

Cryptocurrencies: They’re legal, and they’re accepted as payment in some places.

Cryptocurrency exchanges are legal and regulated by the Securities and Futures Trading Commission (SFTA)

Cryptocurrencies and exchanges are allowed in Switzerland, and the country has taken a notably proactive approach to crypto laws. Cryptocurrencies are considered assets by the Swiss Federal Tax Administration (SFTA), are subject to the Swiss wealth tax, and should be reported on yearly tax filings.

Bater

Digital currencies in Switzerland must register and get a license from the Swiss Financial Market Supervisory Authority (FINMA) in order to operate. In Switzerland, cryptocurrency guidelines are applicable to ICOs. The Financial Market Supervisory Authority (FINMA) applies current financial legislation to offerings in a variety of industries, including banking, securities trading, and mutual funds (depending on the structure). In 2019, the Swiss government passed a motion instructing the Federal Council to adjust current financial regulatory regulations to incorporate cryptocurrencies. The Blockchain Act, passed by Switzerland’s parliament in September 2020, clarifies the legalities of exchanging cryptocurrencies. And operating cryptocurrency exchanges in the Swiss constitution.

The Distributed Ledger Technology (DLT) Act was introduced in Switzerland in 2021 with the purpose of changing Swiss regulations to take benefit of digital currencies development. A new sort of authorization category for bitcoin trading sites was introduced in the DLT Law.

Regulations to Come

Switzerland’s government has stated that it will continue to work toward a cryptocurrency-friendly regulatory environment. In 2016, the city of Zug, a major worldwide cryptocurrency hub, accepted Bitcoin as payment for city fees. And Swiss Economics Minister Johann Schneider-Ammann announced in January 2018 that his goal was to establish Switzerland as “the crypto-nation.” Similarly, Jörg Gasser, Switzerland’s Secretary of State for International Finance, has underlined the importance of promoting cryptocurrencies while maintaining existing financial rules.

Malta

Cryptocurrencies are not legal tender in Malta.

Cryptocurrencies are legalized under the VFA Act.

Malta has chosen a highly forward-thinking strategy for cryptocurrency legislation, establishing itself as a world leader in the field. Despite the fact that cryptocurrencies are not legal cash in Malta. The government recognizes them as “a means of trade, a unit of account, or a store of value.” Malta does not have any special cryptocurrency tax legislation, and VAT is not currently applied to transactions involving the exchange of fiat currency for bitcoin.

Barter

Malta has legalized the payment system, and the Maltese legislature implemented groundbreaking legislation in 2018 that established a new set of regulations for digital currencies and resolved AML/CFT concerns. The Virtual Financial Assets Act (VFA), that established a global precedent by creating a regulatory system accessible to crypto exchanges, ICOs, brokers, wallet providers, advisers, and asset managers, was one of the laws included in the legislation.

The VFA laws were followed by the Emerging Information Norms and Services Act, Which provided the framework for future crypto service provider registration and accountability. The Malta Digital Innovation Authority (MDIA) was also founded. Which is the government agency in charge of developing crypto policy. Coordinating with other countries and institutions, and imposing ethical standards for the usage of crypto and blockchain innovation.

Regulations to Come

Although no new crypto law is on the surface, the Malta Financial Services Authority (MFSA). Stated in its strategic plan for 2019-2021. That it “will actively organize and control marketing risks referring to licensed virtual assets and digital currencies businesses” to better address financial fraud and other securities fraud threats.

The Maltese government stated that work merging artificial intelligence digital currency regulation, in particular criteria for security token offers. Additional Maltese rules are likely in the near future as a result of these measures.

International Cryptocurrency Regulations? Crypto Regulation In Different Countries

Singapore

Cryptocurrencies: Not legal tender

Bartering of Cryptocurrency: Legal, registration with the Monetary Authority of Singapore required

Cryptocurrency exchanges and trading are allowed in Singapore. And the city-state has taken a more welcoming stance on the topic than some of its regional neighbors. Despite the fact that cryptocurrencies are not regarded as legal cash, Singapore’s tax officials treat bitcoins as “goods” and charge Goods and Services Tax (the country’s version of VAT). The Monetary Authority of Singapore (MAS) confirmed in 2017 that, while it does not oversee virtual currencies, it does regulate the issuance of digital tokens that are definedsecurities.

MAS issued public cautions about the hazards of investing in cryptocurrency products in 2020, although taking a balanced approach. In 2022, MAS issued instructions to crypto service providers that virtually prevented them from advertising their services to the general public..

Barter

The Malaysian Securities Authority (MAS) issued a public warning regarding the risks of cryptocurrency speculating. Cryptocurrencies, according to Deputy Prime Minister Tharman Shanmugaratnam, are subject to the same anti-money laundering and counter-terrorist funding regulations as traditional currencies.

Regulations to Come

With the PSA in place, Singapore’s crypto firms are largely compliant with the FATF’s most recent guidelines. But, in order to better align its position, MAS is expected to issue more regulations. New financial sector rules with tougher AML/CFT standards for bitcoin service providers, as well as better technological risk management recruitment in financial institutions, could be among these regulations.

Singapore’s latest regulatory actions indicate a resurgence of foreign interest in the country’s cryptocurrency sector. Many high-profile Chinese service providers, including ByBit, Huobi, Cobo, and OKCoin, as well as their consumers, migrated to Singapore in 2021 as a result of China’s crackdown on cryptocurrencies.

Australia

Cryptocurrencies: Legal, treated as property

Bartering of Cryptocurrency: Legal, but you must register with AUSTRAC.

Cryptocurrencies and exchanges are legal in Australia, and the country has been progressive in its implementation of cryptocurrency regulations. In 2017, Australia’s government declared cryptocurrencies legal and specifically stated that Bitcoin (and cryptocurrencies that shared its characteristics) should be treated as property and subject to Capital Gains Tax (CGT). Cryptocurrencies had previously been subject to controversial double taxation under Australia’s goods and services tax (GST) – the change in tax treatment is indicative of the Australian government’s progressive approach to the crypto issue.

Barter

Since 2018, the Australian Transaction Reports and Analysis Centre (AUSTRAC) has required exchanges operating in Australia to register, identify and verify users, maintain records, and comply with government AML/CFT reporting obligations. Unregistered exchanges are subject to criminal charges and financial penalties.

In May 2019, the Australian Securities and Investments Commission (ASIC) issued updated regulatory requirements for both initial coin offerings (ICOs) and cryptocurrency trading. Similarly, in August 2020, Australian regulators forced many exchanges to delist privacy coins, a specific type of anonymous cryptocurrency.

Regulations to Come

Australia has established a pattern of proactive cryptocurrency regulation, and these latest regulations illustrate the country’s continued effort to provide a clear framework for crypto businesses to operate in the coming years. 

In particular, the Australian government is moving to increase its regulation of cryptocurrency exchanges. In December 2021, Australia announced plans to introduce a new licensing framework.  The proposed framework would enable consumers to safely purchase and sell crypto assets in a regulated environment. It will also represent a move to position Australia at the forefront of the global effort to keep tech companies in check. 

The European Union (EU)

Cryptocurrencies: No Member states are permitted to create their own cryptocurrencies under international law.

Bartering of Cryptocurrency: Each member state has its own set of rules.

Digital currencies are widely lawful throughout the European Union, but cryptocurrency exchange legislation varies by member state. Cryptocurrency taxes varies as well, but many member nations levy a 0-50 percent capital gains tax on cryptocurrency revenues. The European Union’s Court of Justice declared in 2015 that traditional currency exchanges for cryptocurrencies should be VAT-free.

The EU’s Fifth Anti-Money Laundering Directive (5AMLD). Took effect in January 2020, bringing cryptocurrency-fiat currency trades within EU anti-money laundering legislation and demanding KYC/CDD from customers as well as mandatory auditing standards. 6AMLD went into effect in December 2020, making cryptocurrency compliance more demanding by introducing hacking to the list of predicate crimes for financial fraud.  

Barter

Cryptocurrency exchanges are not currently regulated at a regional level. In certain member states, exchanges have to register with their respective regulators. Like Germany’s Financial Supervisory Authority (BaFin), France’s Autorité des Marchés Financiers (AMF), and Italy’s Ministry of Finance. Regulators grant authorizations and licenses for EU drafted documents. Individual digital currencies raise the possibility of being used by passport exchanges. allowing them to operate under a single regime across the entire bloc. 

6AMLD had ramifications for trading platforms as well. The regulation extends culpability for money laundering violations to both legal and natural people, implying that the top executives of cryptocurrency wallet providers and cryptocurrency exchanges must have considerably wider supervision of their companies’ own AML systems.

Regulations to Come

The European Union is aggressively looking into new cryptocurrency regulations. Worries about the hazards connected with individual digital currencies were raised in a draft EU document. It also stated that the European Central Bank was contemplating establishing its own digital money. The European Commission initiated a consultation process campaign in January 2020 to determine where and how crypto assets fit into the EU’s existing legal framework. In September 2020, the Commission issued a new proposal known as the Markets in Crypto-Assets Regulation (MICA). The plan included proposed cryptocurrency regulation measures. Like new licensing schemes for crypto-asset issuers, industry ethics guidelines, and new consumer safeguards.

The European Commission presented a set of policy recommendations affecting virtual asset service providers (VASP) all across EU in July 2021. The transference of fund regulations (TFR) was expanded to all VASPs in the EU, and the collecting of data on senders and recipients of cryptocurrency transfers will be mandated.

China

Cryptocurrencies are not considered legal tender.

Bartering of Cryptocurrency: Is Unlawful

In 2013, the People’s Bank of China (PBOC) prohibited banking firms from conducting Bitcoin transactions. And in 2017, it moved even further by prohibiting initial coin offerings (ICOs) and domestic digital currencies. China, naturally, does not regard cryptocurrencies as the official currency. And the government has a record of enforcing strict cryptocurrency regulations around the world.

Barter

China suspended all local crypto exchange processing in June 2021. The new policy practically outlawed all cryptocurrency trading (domestic and global) and triggered a massive token sell-off. Local digital currencies Despite being prohibited in China. Bypasses are feasible by using foreign venues and sites that are not blocked by Chinese internet routers.

Regulations to Come

Will China loosen its cryptocurrency prohibition within the next year? Not sure. Past remarks by government officials embracing blockchain technology have fueled suspicion that China aspires to be a cryptocurrency pioneer. China’s central bank is focusing on releasing an official cryptocurrency in the timeframe that has not been established yet. For decades, it started in September 2021, with pilot trials of its e-CNY cryptocurrency having been concluded in many cities. The e-CNY token will be recognized as payment for goods, bills, and transportation fares. And tolls, which will be a replacement for money and coinage.

  1. Blockchain Technology
  2. Defi
  3. NFTs
  4. DAOs
  5. Crypto
  6. Web 3.0
  7. Altcoin Tokenomics
  8. Metaverse
  9. Smart Contracts

Related Content

Leave a Comment