Regulation within the Bitcoin scene is something that is of great controversy, and it is time to talk about the topic. As someone who is into the Bitcoin scene, it is very difficult to watch the regulation changes due to new companies trying to change the rules to suit themselves. However, I am sure that I am not the only person who feels the same way.
At this moment in time, the regulations are different for individual countries, and different states. That proves that there is no firm set regulations or legal status, but that only creates instability. Furthermore, there are some countries that prohibit the use completely.
Bitcoin Regulations Now
The regulations and laws today do not seem too far away from those in 2014. However, as I have stated, depending on where in the world you are, you will find different laws and policies. Even the names of some of the terminologies in the market change from place to place, too.
For example, the following countries have recently incorporated laws into their systems to bring all institutions and transactions of cryptocurrencies under terrorist financing and money laundering laws:
- The Isle of Man
That means that they have a bigger watch on the activities surrounding crypto and BTC than all of the other countries that allow the use of them.
However, the following countries have taken it a step further. They have banned the use of cryptocurrencies for any activity:
The following countries ban their citizens from using crypto, and any activity that it involves while on their land. However, they do allow the use of it by those people in countries outside their borders:
Other countries do not ban their citizens from investing, however they do enforce indirect restrictions. They do that by baring institutions from facilitating transactions involving crypto within their borders. Those countries are:
There are other countries that see cryptocurrency and blockchain completely differently, though. Some don’t even see it as a threat, which to be honest, neither do I. There are differences in the reasoning behind that view though, and that is dependant upon the country. No countries (as of the date of this article) see crypto as legal tender, but they do see potential in the infrastructure and technology. The reason for that view is often because there is a possibility for investment attraction for the companies within the sector. They are Belarus, Cayman Islands, Spain, and Luxemburg.
Some countries have taken the view that developing their own cryptocurrencies is the best option. For example, Eastern Caribbean Central Bank member states, Lithuania, the Marshall Islands, and Venezuela.
Furthermore, other countries have seen and issues warnings about the issues of cryptocurrency and investments, but they have decided that the dangers, and the market, are both too small to warrant regulatory measures. They are Belgium, South Africa, and the UK.
Places That Allow Payment Through Cryptocurrency
“Crypto Valley”, otherwise known as the Swiss Caton of Zug, and Ticino, both in Switzerland, allow cryptocurrencies such as Bitcoin as a means of payment, even by Government agencies. Furthermore, even though they are in the “restricted” category, the Isle of Man, and Mexico (not in the Restricted category), allow crypto payments alongside their national currencies.
Also, before we think that this list is all of the regulations imposed on people in different countries, it is not. While I will not go into quite as much detail in this section, there are some countries that tax people and businesses based on the valuation of BTC. For example, in the UK, there are three levels of tax depending on what institution receives the currency:
- Corporations - Corporate Tax
- Unincorporated businesses - Income Tax
- Individuals - Capital Gains Tax
Other countries have different tax laws, however, there is one that stands out to me. Switzerland, one of the only countries that allow payment with Bitcoin, actually tax people as though cryptocurrencies are a foreign currency.
What Do Future Regulations Look Like?
The first question that we need to look at is, is the world ever going to agree on a specific set of regulations and laws surrounding cryptocurrency? Looking at the data above, the answer would have to be a no. However, the people we are talking about are the diehard cash movers. To some people, the idea of a purely electronic economy is something of a mystery and cause for concern. When we take into account something new, such as Bitcoin and other coins, using brokers, learning how to buy it, robots, etc. those people are not going to take that lightly.
However, if you consider that the first contactless payment was in 1995, twenty-five years later there are still people not embracing the change. However, there is a significantly higher number of people using it now than ever.
That brings up the question; what will the crypto space be much different in 25 years, or even ten? Personally I think the answer is yes, it will. However, will crypto fizzle out of existence, will it boom, or will it become a replacement for some other currencies only in localized areas?
I don’t think that the world will ever “agree” on a specific set of rules and regulations, no matter how many guides there are. However, there is one possibility that I think may make it into existence. That is, the Bitcoin community and everyone in it will keep the movement going long enough for all countries to get their own regs, and that the world will adapt to it in an organic way instead of a forceful introduction of them.
Only time will tell.