How does cryptocurrency regulation work in each country?

ComplyAdvantage maps the main cryptocurrencies and shows how the regulation of these assets are evolving in certain regions

Editorial Staff  /  November 6, 2019
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Cryptocurrencies have been gaining the world and governments would have no way to ignore this progress. As the crypto market continues to expand, reaching out to new investors and companies, cryptocurrency regulation is being developed in different ways on all continents.

The regulation has the role of monitoring the emerging digital currency system and allows clearer guidelines, as well as promoting security measures. In addition, it is fundamental to the future of digital financing, as regulated processes can bring more legitimacy to the digital financial market and make it more attractive to new businesses, established banks and investors around the world.

To understand the regulatory scenario in several countries, ComplyAdvantage develops charts that map the main cryptocurrencies and show how these assets are evolving in certain regions. The system analyzes cryptocurrency regulatory environments using its own Light-to-Tight scale.

Thus, the following criteria are analyzed: Status of cryptocurrencies and exchanges; Is the cryptocurrency legalized?; Is the legislation planned to increase encryption?; and Which jurisdictions have the most strictest or relaxed regulations for cryptocurrencies.

cryptocurrency regulation
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How is cryptocurrency regulation in each region?

Asia

According to the diagnosis of ComplyAdvantage, Japan has one of the most progressive regulatory environments for cryptocurrencies. The country broadly considers bitcoin as a legal currency and passed a law in mid-2017, recognizing cryptocurrencies as legal property.

At the end of 2018, Japan also approved a self-regulation for the crypto industry. On the other hand, China currently has one of the world’s most restrictive cryptocurrency environments. The country banned bitcoin transactions in 2013 as well as ICOs and exchanges in 2017 – although many have found alternative solutions.

Europe

Cryptocurrency and exchange regulations in the European Union are determined by individual member states and are considered legal throughout the bloc.

Switzerland has one of the most open environments for cryptocurrencies and exchanges in Europe. Proof of this is that in 2016, the city of Zug, known as “Crypto Valley”, began accepting bitcoin as a means of payment of the city’s taxes. Swiss Economy Minister Johann Schneider-Ammann announced his goal in 2018 to make Switzerland the worl’s first “crypto nation”.

North America

Both Canada and the U.S. take a similar approach to cryptocurrency legislation at the federal level, as both countries see cryptocurrencies as securities. However, provincial and state regulations differ widely regarding the income tax requirements of crypto investments.

Latin America

Regulations throughout Latin and South America have legislative spectrum and vary widely according to each country. In Bolivia there is a unilateral ban on cryptocurrencies and exchanges. Ecuador, the first country to launch its own token, faces a ban on all cryptocurrencies rather than the government-issued SDE token (Electronic Dinero System = electronic currency system).

In Mexico, Argentina, Brazil and Chile, cryptocurrencies are widely accepted as payment. Another cryptocurrency-friendly country is Venezuela, where assets are widely accepted, driven by the economic crisis and the subsequent free fall of the bolívar.


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