The year 2017 was significant for Bitcoin, not only due to its staggering 1600% price surge but also because of its frequent appearances in financial headlines, capturing the attention of investors worldwide.
As regulatory bodies accelerate efforts to establish guidelines, global oversight of cryptocurrencies is gradually taking shape. This article provides a structured overview of the regulatory approaches and policies adopted by 16 countries as of March 2018.
China
China maintains a strict regulatory stance toward cryptocurrencies, currently prohibiting the operation of digital currency exchanges.
- On March 9, 2018, the People’s Bank of China (PBOC) Governor Zhou Xiaochuan stated that China remains open to digital currencies, provided they do not destabilize the financial system, and emphasized the need for dynamic supervision.
- On March 6, 2018, Zhou Xuedong, a National People’s Congress representative and director of the PBOC’s Beijing Operations Office, proposed establishing a negative list for Bitcoin trading platforms to mitigate risks and suggested studying long-term regulatory mechanisms based on international experience.
- On February 28, 2018, the PBOC reiterated that Bitcoin is a specific virtual commodity without legal tender status, prohibiting its circulation as currency.
United States
U.S. regulatory agencies have defined cryptocurrencies differently: as commodities by the CFTC, securities by the SEC, and property by the IRS.
- On March 13, 2018, the U.S. District Court for the Eastern District of New York ruled that the CFTC has the authority to treat cryptocurrencies as commodities.
- The SEC issued a statement confirming that digital assets falling under securities laws must be traded on registered platforms, warning investors about unregulated exchanges.
- Several banks, including Scotiabank and TD Bank, restricted cryptocurrency purchases via credit and debit cards.
Japan
Japan’s Financial Services Agency (FSA) has taken aggressive steps to regulate cryptocurrency exchanges.
- On March 8, 2018, the FSA issued penalties to seven exchanges, shutting down two and requiring five others to improve operations.
South Korea
South Korea has maintained a cautious approach, with ICOs currently illegal but under review for potential relaxation.
- The government is considering lifting the ICO ban under certain conditions to allow token sales.
- Only 19% of cryptocurrency accounts had completed real-name verification as of March 6, 2018.
- Public officials are banned from holding or trading cryptocurrencies, but ordinary citizens are permitted to trade.
European Union
The EU is evaluating existing rules for cryptocurrencies and ICOs while promoting blockchain innovation.
- The European Central Bank has stated that regulating cryptocurrencies is not within its mandate.
- The European Banking Authority (EBA) suggested preventing banks from holding cryptocurrencies rather than directly regulating the assets.
- The EU plans to establish a "financial laboratory" to address fintech challenges and develop blockchain standards.
Russia
Russia is advancing toward legalizing cryptocurrencies while exploring a state-backed digital currency.
- President Vladimir Putin ordered the issuance of a state-backed digital currency to circumvent international financial sanctions.
- Draft legislation aims to regulate digital financial assets, defining cryptocurrencies and legalizing mining.
- The government is inviting miners, particularly from China, to operate in Russia with support on electricity and hardware.
Canada
Canadian banks have adopted mixed policies regarding cryptocurrency transactions.
- Scotiabank prohibited credit and debit card purchases of cryptocurrencies.
- The Royal Bank of Canada (RBC) allows limited cryptocurrency transactions under specific conditions.
- The Canadian Securities Exchange (CSE) announced a blockchain-based platform for security token offerings (STOs).
Thailand
Thailand is introducing comprehensive regulations for cryptocurrencies and ICOs.
- A new regulatory framework effective April 2018 requires ICO operators to hold registered capital of at least 5 million Thai baht.
- The Revenue Department will propose a 10% capital gains tax on cryptocurrency profits.
- The Bank of Thailand has banned banks from providing services related to cryptocurrency trading.
Sweden
Sweden is exploring the issuance of a central bank digital currency (CBDC), the e-krona.
- The Riksbank has initiated a project to assess the feasibility and necessity of a state-backed digital currency.
Switzerland
Switzerland has positioned itself as a "Crypto Nation" with clear guidelines for ICOs.
- The Swiss Financial Market Supervisory Authority (FINMA) published ICO guidelines, categorizing tokens into payment, utility, and asset tokens.
- The government aims to make Switzerland a global hub for blockchain innovation.
Singapore
Singapore is enhancing investor protection in cryptocurrency trading.
- The Monetary Authority of Singapore (MAS) is evaluating additional rules for cryptocurrency exchanges to safeguard users.
- The government has no plans to ban cryptocurrency trading, recognizing its role as both a payment method and an asset.
Belarus
Belarus has legalized cryptocurrencies and ICOs with tax incentives.
- A presidential decree effective March 28, 2018, allows the purchase, sale, and exchange of cryptocurrencies with a five-year tax exemption.
- The government is attracting miners and investors to develop cryptocurrency infrastructure.
Malta
Malta is establishing a robust regulatory framework for blockchain and cryptocurrencies.
- The government plans to set up the Malta Digital Innovation Authority to certify technology arrangements and regulate ICOs.
- New laws will govern intermediaries like exchanges, wallet providers, and asset managers.
Israel
Israel has clarified tax treatment and regulatory requirements for cryptocurrencies.
- The Israel Securities Authority announced a regulatory sandbox for ICOs, assessing them on a case-by-case basis.
- The Supreme Court ruled that banks cannot restrict accounts of cryptocurrency businesses.
- Cryptocurrencies are treated as assets for tax purposes, subject to capital gains tax.
Armenia
The Armenian government has rejected legislation aimed at regulating cryptocurrency mining.
- Proposed amendments defining miners and offering tax benefits were not approved.
Liechtenstein
Liechtenstein is fostering a blockchain-friendly environment for startups.
- The government aims to become an international hub for blockchain projects, offering direct links to regulators and a supportive administrative framework.
Frequently Asked Questions
What is the general global trend in cryptocurrency regulation?
Most countries are moving toward regulation rather than outright bans. Approaches vary from strict oversight in China to supportive frameworks in Malta and Switzerland.
How are cryptocurrencies classified for regulatory purposes?
Classifications differ by country. In the U.S., they can be commodities, securities, or property. In Thailand, they are digital assets, not currency.
What should investors consider when trading cryptocurrencies?
Investors should use registered platforms compliant with local laws, understand tax obligations, and be aware of potential risks like market volatility and fraud.
Are ICOs legal everywhere?
No. ICOs are banned in some countries like China and South Korea, while others like Switzerland and Malta have established clear guidelines.
How do taxes apply to cryptocurrency transactions?
Tax treatments vary. Some countries like Israel levy capital gains tax, while others like Belarus offer temporary tax exemptions.
What is the future of state-backed digital currencies?
Several countries, including Sweden and Russia, are exploring central bank digital currencies (CBDCs) to modernize financial systems.
For those interested in tracking real-time regulatory updates 👉 explore global crypto policies. Staying informed helps navigate the complex landscape of digital asset regulations.