The crypto industry has faced tremendous pushback from major economic powers in recent years. But as the industry blooms beyond its core base and into the mainstream investor arena, jurisdictions are opening up to the possibility that perhaps the industry at large is here to stay.
As a result, a growing number of countries are adopting regulations to accommodate it.
Why Some Countries are Apprehensive Over Crypto
A collective of nations are apprehensive over crypto-related activities. Some have even banned cryptocurrency exchanges and services. Much of the resistance is due to the lack of a regulatory framework that will allow the economy to integrate the sector and reap the benefits sustainably.
Because cryptocurrencies are underpinned by the blockchain, which is borderless, the jurisdictions are powerless when it comes to controlling funds stored on cryptocurrency exchanges and wallets by the citizenry. This means that nationals who store funds on crypto platforms can easily get away with tax evasion and money laundering. As such, some countries find it easier to enact blanket bans on the industry.
China has, for example, barred financial institutions from offering cryptocurrency services and prevented cryptocurrency exchanges from operating within its territory. It also recently embargoed cryptocurrency mining in a bid to curb consequent environmental damage.
Other countries with a similarly fraught relationship with cryptocurrencies include Algeria, Bolivia, Egypt, and Indonesia.
The EU Wants More Transparency
Speaking of hassled crypto relationships, some economic blocs such as the European Union are developing steps to ensure that all cryptocurrency transactions made within their territory are traceable. Under the new plan, which was announced in July, major crypto exchanges such as Binance and Coinbase will be compelled to collect and avail EU customer details to the relevant EU financial oversight authorities.
The proposed strategy highlights that anonymous cryptocurrency wallets will also be banned.
Nations That Support Cryptocurrency
There are nations that support the cryptocurrency industry. The United States, for example, has made major strides over the years to accommodate the sector. While the current conditions are not perfect, they are not overly restrictive.
In the US, digital currencies fall under the Bank Secrecy Act. All cryptocurrency agencies in the nation are covered under the statute and are required to adhere to stringent accounting and record-keeping statutes. Crypto assets are also subject to taxes. Canada also has a similar framework.
Among the nations that openly embrace cryptocurrencies is El Salvador, which now accepts Bitcoin as legal tender. Australia, Malta, and Cyprus also have crypto-friendly regulations.
