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The growth of cryptocurrency from speculative investment to a new asset class has prompted governments around the world to explore ways to regulate it.
United States
In the United States, the Biden administration clarified crypto use and regulation in 2022, paving the way for the digital dollar.”
The U.S. announced a new framework in 2022 that opened the door to further regulation. The new directive has handed power to existing market regulators such as the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).
Nothing about the crypto markets is incompatible with the securities law,” Gensler said. “Investor protection is just as relevant, regardless of underlying technologies.
We will likely see U.S. regulators coming down hard on cryptocurrency in the coming years.
The Biden administration’s new framework also sees “significant benefits” from creating a central bank digital currency (CBDC) or a digital form of the U.S. dollar.
“You wouldn’t need stablecoins; you wouldn’t need cryptocurrencies if you had a digital U.S. currency,” Powell said in congressional testimony. “I think that’s one of the stronger arguments in its favor.”
CHINA
The People’s Bank of China (PBOC) bans crypto exchanges from operating in the country, stating that they facilitate public financing without approval.
Furthermore, China placed a ban on Bitcoin mining in May 2021, forcing many engaging in the activity to close operations entirely or relocate to jurisdictions with a more favorable regulatory environment.8 And in September 2021, cryptocurrencies were banned outright.9
However, the country has been working on developing the digital yuan (e-CNY). In August 2022, it officially began rolling out the next round of its central bank digital currency (CBDC) pilot test program.
JAPAN
Japan takes a progressive approach to crypto regulations, recognizing cryptocurrencies as legal property under the Payment Services Act (PSA).
Japan treats trading gains generated from cryptocurrency as miscellaneous income and taxes investors accordingly.
AUSTRALIA
In 2021, Australia announced plans to create a licensing framework around cryptocurrency and potentially launch a central bank digital currency (CBDC).
South Korea
South Korea also banned all privacy coins from exchanges in 2021.31
In 2021, the country’s Parliament approved a 20% tax on digital assets to take effect in 2022, but it has been delayed until 2025.
INDIA
“There is a 30% tax levied on all crypto investments and a 1% tax deduction at source (TDS) on crypto trades.”
“The country launched its tokenized rupee pilot program in late 2022.”
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Analysis – “The world’s big players are all handling crypto regulations differently, but the overall consensus is that governments are adopting the technology and many are developing their own variation of a CBDC.
What the future holds for a regulated crypto world is still in the air, but as it seems to me, the initial idealized version of peer-to-peer crypto will die as a sacrifice for mass adoption via government regulation.” – Easton Nguyen
