Cryptocurrency is a digital asset built on a decentralized chain of networks called blockchain, which is used as a means of exchange of value. The concept of cryptocurrency has moved from a speculative investment to a new class of asset and digital currency. Therefore, governments in various countries and regions have been working to create a framework of regulation to protect users of the blockchain network.
The Legal Landscape in Cryptocurrency
As much as the concept of cryptocurrency is decentralized, there are still legal frameworks that guide its use. However, these legal landscapes and regulations are location-specific, depending on the policies in the country or region. Here is a quick evaluation of cryptocurrency’s legal status from country to country
The United States
The dual government system in the United States means cryptocurrency regulations can vary from state to state. Although many states have yet to take a concrete standpoint about cryptocurrency, the United States remains one of the countries with the most positive approach to the crypto community. It is one of the countries where cryptocurrency is legal and allows the trading community to thrive.
The United Kingdom
The United Kingdom has yet to put out any outright legislation that regulates cryptocurrency. However, The Financial Conduct Authority (FCA), under the currency system, is responsible for regulating licensing to authorized businesses related to cryptocurrency, including exchanges. The FCA sets strict rules that individuals or organizations seeking authorization have to follow. The United Kingdom also gains taxes on crypto trading just as they do on traditional money trading.
The European Union
The European Union is comprised of 27 countries, which makes the regulation at the zonal level a complicated one. However, most of the countries in the European Union have opted for a mild regulatory framework for the crypto space. Also, in the year 2020, the European Commission concluded plans to legislate and regulate virtual assets, including cryptocurrency. The regulation includes helping individuals to safely access and secure cryptocurrency.
Canada
Canada is another country with a friendly cryptocurrency stance. The Canada Revenue Agency (CRA) views cryptocurrency as an item, which means it is considered for the purpose of gaining income tax. Therefore, all capital and income gain from crypto proceedings should be reported and properly taxed. Canada made history by becoming the first country to accept a bitcoin-traded fund (ETF) with some crypto coins trading on the Toronto Stock Exchange.
India
The Indian government hasn’t declared any stance against the use or trade of cryptocurrency; neither have they made moves to regulate nor ban digital assets. Technically, crypto trading in India is done at the owner’s risk because there is no provision for safety or dispute resolution by the government.
Conclusion
The popularity and acceptability of cryptocurrency in various countries and regions around the world is rapidly increasing. It is fast becoming a global asset and a medium for value exchange. However, the regulation and legislation of cryptocurrency varies greatly depending on location. Therefore, it is best to understand the legal standpoint of cryptocurrency in your locality to ensure you don’t get on the wrong side of the law.
