Cryptocurrency Regulations Around the World

As cryptocurrency’s transformation from speculative investment to a balanced portfolio stablemate continues to gather pace, governments around the world remain divided on how to regulate the emerging asset class. 

Below, we break down the current digital currency regulatory landscape by country.

As cryptocurrency has become a more significant factor in the global investment landscape, countries have taken different approaches to regulate the asset class.

Despite the prevalence of cryptocurrency in the United States, the country hasn’t yet developed a clear regulatory framework.

The patchwork of regulations in other countries means that cryptocurrencies are subject to different classifications and tax treatments around the world.

Despite a large number of cryptocurrency investors and blockchain firms in the United States, the country hasn’t yet developed a clear regulatory framework for the asset class. 

The Securities and Exchange Commission (SEC) typically views cryptocurrency as a security, while the Commodity Futures Trading Commission (CFTC) calls Bitcoin (BTCUSD) a commodity, and the Treasury calls it a currency. 

Crypto exchanges in the United States fall under the regulatory scope of the Bank Secrecy Act (BSA) and must register with the Financial Crimes Enforcement Network (FinCEN). 

They are also required to comply with anti-money laundering (AML) and combating the financing of terrorism (CFT) obligations.

Meanwhile, the Internal Revenue Service (IRS) classifies cryptocurrencies as property for federal income tax purposes.Crypto investors should closely monitor a high-profile court case between Ripple Labs Inc. and the SEC, for violating "registration provisions of the federal securities laws," filed in Dec. 2020. 

More recently, it was announced on Sept. 7, 2021, that the agency threatened to sue leading digital currency exchange Coinbase Global Inc. (COIN), for further regulatory clarity on a new program called Lend. A few days later, Coinbase ended the program.

Regulators have generally taken a proactive stance toward crypto in Canada. It became the first country to approve a Bitcoin exchange-traded fund (ETF), the first launched on Feb. 18, 2021, with the second launched on Feb. 19, 2021, both on the Toronto Stock Exchange.

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