With the winter session of the parliament starting on November 29, 2021, the Government of India plans to present the ‘Cryptocurrency and Regulation of Official Digital Currency Bill, 2021′ in the Lok Sabha for approval.
There is wide speculation going on whether the Indian government is planning to ban all cryptocurrencies and empower the RBI to launch its digital currency or it wants to regulate the crypto space to ensure national security and consumer interest.
While the situation will only get clear once the contents of the bill are made public, we are here going to look at how other countries are regulating crypto.
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Here is how the major countries of the world are regulating cryptocurrency:
United States
The United States has been largely positive towards crypto so far. Like India, rules are regulations are decided at the central and the state level. As a result, the rules may differ from one state to another.
There have been state-level regulations. For instance, New York favors crypto and launched a bill called ‘BitLicense’ for businesses and crypto exchanges.
There are many other similar states like Miami and Wyoming that are positive towards crypto and have launched favorable regulations to promote the use and acceptability of crypto in the US.
It is believed that regulators at the central level will announce rules and regulations for the crypto industry soon.
China
China has been the harshest among major economies towards cryptocurrencies. While China was the hub for Crypto Mining, the country banned it in June 2021.
It was a make-or-break moment for the crypto industry wherein more than 40% of the crypto mining operations were taken off the rail in a second.
China started with banning initial coin offerings (ICOs) in 2017 followed by shutting down crypto exchanges. The country is in the process of launching a digital Yuan i.e. a digital version of its fiat currency.
United Kingdom
The United Kingdom, like with many other countries right now, does not have a set framework and legislation to regulate cryptocurrency at this moment.
The licenses to the crypto-related businesses including crypto exchanges are being provided by the Financial Conduct Authority. Like the other businesses that seek licenses from the FCA have to comply with a stringent set of regulations.
The regulations are a tad stringent for organizations dealing with crypto futures and options. As far as taxation is concerned, crypto gains are taxed similar to currency gains under capital gains tax.
It is not to say that the FCA has turned a blind eye to the crypto business. It has been issuing warnings informing the general public about the potential risks of crypto investments.
Singapore
Singapore is one nation that has set clear rules for the crypto sector. As per the regulations in Singapore, the crypto industry is expected to follow the rules set by the Monetary Authority of Singapore’s (MAS) Payment Services Act.
Further, dealing in cryptocurrency that may include buying, selling, transferring, or holding crypto would require complying with the AML and CTF rules.
European Union
Due to a large number of member states with varying interests, regulation in the European Union is complicated. Most members have launched soft-touch frameworks that help in regulating at individual nation level but the EU as a whole is yet to come up with a consolidated framework.
The draft Markets in Crypto-Assets Regulation (MiCA) legislation was introduced by the EU in September 2020. The draft states that it will treat crypto as regulated financial instruments and will require proper approval from the regulators. The draft further categorizes each crypto utility like assets, tokens, e-money, etc and has specific rules for each.
There are other countries like El Salvador which recently became the first country to officially declare Bitcoin as legal tender. And then there are some other countries like Nepal, Vietnam, Colombia, Russia, Ecuador, Algeria, Egypt, Indonesia, and Bolivia that have banned cryptocurrency.
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We will only get to know more about India’s stand in the next few days. The industry experts, however, expect India to take the regulation route and not put a blanket ban on cryptocurrencies.
