Cryptocurrency is booming, and since its inception, global regulators have struggled to keep up thanks to a limited knowledge base and a lack of consensus on exactly how to proceed. Many governments are making a big push to adopt global regulations to thwart the use of crypto in money laundering and terrorism, and regulations were a hot topic at the G20 summit in Spring of 2018. Here’s what U.S. companies need to know about the current state of cryptocurrency regulations, and what to expect in the future.
How Specific Countries Are Dealing With Crypto
The formation of a global regulatory body could take some time, since all nations are not yet in agreement on the level of regulation and intervention required. However, most countries are taking their own steps to oversee cryptocurrencies. U.S. businesses that transact in crypto need to keep an eye and ear on what’s happening, because the variations in regulations are vast.
United States: The U.S. is the world’s second-largest trader of bitcoin, but it might surprise many to learn that bitcoin is not legal tender. Regulators can’t even agree on how to classify crypto. The SEC views it as a security, but the Commodity Futures Trading Commission classifies it as a commodity. Finally, the IRS refuses to acknowledge crypto as an actual currency, and instead classifies as property for tax purposes.
Japan: Bitcoin is legal tender in Japan, the world’s largest market for bitcoin, and exchanges are legal if they register with the government. In early 2018, Japan started cracking down on unregistered exchanges, forcing many to close down.
China: Bitcoin is not legal tender in China and technically, trading bitcoin is illegal as well. In 2017, the government banned ICOs – a way for startups to fund themselves by selling their own brands of crypto. However, this has not stopped Chinese investors and traders from mining crypto, and the government is struggling to keep pace.
Switzerland: The Swiss are by far the friendliest crypto regulators in the world, recognizing cryptocurrency as legal tender, and allowing exchanges as long as they register with the government. They have embraced cryptocurrencies and are a hotbed for startups in blockchain.
India: Like China, India does not consider bitcoin to be legal tender, but does not currently regulate exchanges. However, the government is taking steps to outlaw crypto altogether.
This small sampling of attitudes about crypto regulation shows just how far we are from any consensus on uniform cryptocurrency regulations. Companies that do business in the global market should be certain they understand the potential ramifications of dealing in crypto, especially since things change so quickly.
Is Your Team Prepared to Navigate Global Crypto Regulations?
Staying on the right side of regulators when trading in cryptocurrency requires a team that has their fingers on the pulse of the market. Success (and compliance) depends on talented people who are tuned in to what’s happening in the U.S. and overseas. If you are looking for talented FinTech professionals, contact the executive recruiters of MoneyTech Search today.