Defining the legal status of cryptocurrencies across different parts of the world remains a complex one. Some countries have been welcoming by introducing cryptocurrency friendly rules, some have yet not taken any clear stance on the touchy topic while some others are utterly hostile- proposing bans on cryptocurrencies. Another reason that this poses as a complex issue is that the rules keep on changing quickly. Many jurisdictions are yet in process to take a formal decision on this topic. Even those, who have posed friendly regulations on ICO's and cryptocurrencies are yet in experimental mode.
One of the factor that remains common across all the jurisdictions- is the repeated warnings issued against cryptocurrencies. These warnings clearly suggest that cryptocurrencies are neither issued by government nor backed by it. The government recognizes the severe volatility in cryptocurrencies, in addition to the fact that the cryptocurrencies providing anonymousness may give rise to terrorism and money laundering.
Some countries like Algeria, Nepal, Pakistan and Vietnam have banned any or all activities pertaining to cryptocurrencies. Countries like Canada are a little more transparent and flexible for those who want to use cryptocurrencies for buying/selling of goods and services. However, it does not accept cryptocurrencies to be ‘legal tender’- one which is backed/issued by its government. Other countries including China, Columbia, Thailand, Bangladesh have not outrightly placed a ban on cryptocurrencies but have indirectly put restrictions on the use of cryptocurrencies by barring the financial institutions into facilitating any kind of cryptocurrency transactions.
Countries like Venezuela undergoing a financial crisis with their fiat currency 'bolivar' reduced to shambles have in fact found shelter with cryptocurrencies. In 2017, the government of Venezuela introduced 'Petro'- a legalized cryptocurrency backed by the oil barrels of Venezuela.
Some countries have been fairly flexible and supportive to putting a legal status on the state of cryptocurrencies. One of the leading players amongst this group is Switzerland, which is trying to establish itself as a hub for cryptocurrencies as well as blockchain startups. Another country namely South Korea has sort of been on a roller coaster ride with regulations on cryptocurrencies. While in September 2017 the country put a blanket ban on ICO’s, levying heavy taxes on exchanges and with strong rumors of total ban on cryptocurrencies flowing in. But it seems that the country has warmed up to the state of blockchain and cryptocurrencies with lifting up of ban on ICO’s, reclassifying cryptocurrency exchanges as legal entities and even legalizing bitcoin as a remittance method. Malta, yet another country following the steps of Switzerland and South Korea became the first ever to pass bills regulating cryptocurrencies and blockchain based startups.
While the topic still remains a questionable one in most of the countries, there are many jurisdictions who have appointed a committee to research the legal implications on cryptocurrency and blockchain space. We will be hearing decisions in many of them quite soon. The history is in making!
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