The digital currency mogul Bitcoin had its debut in 2009 and influenced a new era of cryptocurrency. It is still in debate for its better use by various worldwide authorities, but the question remains that is it legal or not?
There are various countries that have used a wait-and-see approach with cryptocurrencies like bitcoin but with some regulatory actions so that there is no misuse. The United States has accepted bitcoin as a Money Services Business, which binds it to certain legal restriction and is taxable as property by the IRS (International Revenue Service)
Similarly, countries like Canada and Australia, where the former views it as a business income and the latter views it as an asset so it comes under capital gains tax.
The United Kingdom always had a pro-stance with Bitcoin and wants the regulatory environment to be supportive of the cryptocurrency.
Acceptance Of Digital Currencies In Asia
In spite of these countries being supportive of the innovation and its beneficial uses, there still are some countries in Asia particularly, those who do not entirely support the concept. Some countries stay wary of its decentralized nature and volatility and link it with illicit activities like funding terrorist organizations and drug trafficking.
China’s Sweet And Sour Relationship With Cryptocurrency.
China has openly dissuaded the use of virtual currencies aggressively. As it solidifies its policies against the use of virtual currencies it would leave a global bearing on the digital currency market.
The People’s Bank of China perceives digital currency as illegal use. Reason’s being its decentralized nature and believes that it does not hold any value because of lack of any legal status. In 2017 they banned ICO’s and cryptocurrency exchanges.
Although there have been recent developments against this, where people witnessed a silver lining when a Chinese court ruled out that Bitcoin is a Digital Property. This marked a shift in the adoption of cryptocurrency. In October 2019, President of China Xi Jinping encouraged the development of blockchain technology.
Almost a 38 fold increase in Blockchain patent filing was observed in Chinese banks from 11 filings in 2016 to 433 filings in 2019.
Due to the economic turndown and the coronavirus pandemic, some believe that the tech and finance leader Maybe pushed to legalize the adoption of cryptocurrencies.
In other news, Hong-kong which is in controversial relations with china had a local bitcoin community pool their funds to run Bitcoin – centric ads, urging citizens to be their own bank.
Trams and bank locations will feature these ads until October 8.
Singapore’s Friendly Approach to Cryptocurrency
Singapore has taken a much friendlier stance with cryptocurrencies as compared to its neighbors. Cryptocurrencies instead of legal tender, are considered as goods and come under goods and services tax.
Money Authority of Singapore (MAS) has been soft with its approach to cryptocurrency exchange regulations. Even though they have issued press releases warning the public of risks associated with cryptocurrency speculations, their main concerns revolve around illicit uses of the technology like money laundering, terrorist financing, and other financial crimes.
MAS has provided various regulatory advancements that do not just counter AML/CFT crimes but also protect the interests of the investor . The PSA act enforces cryptocurrency businesses to comply with MAS and obtain a license.
Singapore emerges as a key hub in Asia for Crypto investment as it is continuously regulating the industry to clamp down the limitations that are associated with it, and helps in protecting the interests of investors.
India’s Estranged Approach To Cryptocurrency
There has been an estranged relationship between the Indian government and cryptocurrency in the Indian subcontinent. Although the industry seems to be booming while witnessing an increase in crypto investors during the lockdown the government is planning to bring in a law that bans cryptocurrency.
In 2018 the RBI prohibited regulated entities to cater services to businesses or individuals dealing in cryptocurrencies, even a draft bill was circulated suggesting to slap a fine of Rs. 25 crores or 10 years of imprisonment if found dealing.
But that was dumped by the Supreme court stating everyone had the right to create new industries in cryptocurrencies and had a fundamental right to trade in cryptocurrencies.
Since then notices have been sent to virtual platforms dealing in cryptocurrencies by the income tax and indirect tax department reflecting on issues regarding the filing of tax and whether the income earned is being declared as a good or service under the goods and services act.
As retail investors have found their bode in virtual investing where traditional assets have been battered down by the economy during the corona outbreak, Industry insiders have claimed that the government is losing out on precious revenue inflows due to not being able to design a regulatory framework.
Even though the world moves forward with this newfound technology there are still long ways to conquer before being declared as legal tender. Some countries have come forward in a positive approach and accepted it as a good or a commodity to invest in whereas some countries still have to frame regulations in order to accept this revolutionizing advancement.