The legal status of cryptocurrencies
Are cryptocurrency operations legal? The world has no united position on this matter. Many states have already legalized Bitcoin, but there are also ones that banned its use. Let’s see how the laws of different states view cryptocurrency. Those who plan to open cryptocurrency startups and question the business location must know this information.
Japan
Bitcoin equals property valuable, or rather, legal method of payment in Japan since April 2017. The cryptocurrency was not recognized neither as a currency nor as e-money, but this brought nothing but benefits to Bitcoin holders. Since 1 July operations with cryptocurrencies are no longer charged with 8% consumption tax. Another tax indulgence is alleviation of VAT. However, the initial use of Bitcoin as currency requires the payment value added tax. In addition, the registration of operators who change cryptocurrency to fiat money is undertaken in Japan.
Switzerland
Switzerland has long been one of the global financial centers. Big stock exchanges and banks are concentrated in this country, and now many cryptocurrency startups are set up there. This is why the global Bitcoin community embraced the initiative of the Swiss Federal Council proposed in July, aimed at digital currency legalization. Around the same time one of the banks introduced to its clients an option to buy and keep cryptocurrencies.
South Korea
South Korea introduced many innovations aimed at providing legal grounds for cryptocurrencies. For instance, payment, deal and transaction providers have already been legalized. Further steps in legislative work will be aimed at countering money laundering and compliance with ‘know your client’ policy.
USA
The United States is a real melting pot of cryptocurrency legislation, as it differs in each state. In June, Nevada became known for being the first state ever to ban taxation of blockchain transactions and cancel licensing for companies which work with Distributed Ledger Technology. Delaware is not lagging behind: it gave the green light to the use of blockchain in securities trading. Legislation amendments will come into force on 1 August. Arizona accepted the legitimacy of blockchain signatures and smart contracts. This state is also a leader in amount of Bitcoin ATMs among all states of America. New York, however, lost a few dozen Bitcoin stock exchanges, mining pools, and services of cryptocurrency purchase-and-sale due to the introduction of BitLicense – rules of licensing of organizations dealing with cryptocurrencies.
The United Kingdom
The Great Britain, however popular cryptocurrencies and however big the amount of cryptocurrency deals might be there, still did not develop a clear concept of legislation development in this field. For more than a year now, under close observation of Financial Supervision Authority (FSA), the activities of the cryptocurrency companies are being tested. For this reason one can assume that the cryptocurrency policy will change in the future. For now, this policy is not fully clear even to the legislators.
Australia
The Australian Digital Currency Commerce Association, or ADDCA, has developed and published the code of conduct for cryptocurrency market participants, and it has already been implemented. The aim of this code is to instill confidence of the people in fair stock deals. The document draws on compliance with anti-money-laundering legislation and ‘know your client’ policy. One of the demands of this code is to check business management and owners for illegal activities in the past. All organizations also must undergo annual audit and recertification.
As one can see, even some of the biggest economies of the world have adopted a wait-and-see approach and do not hesitate with legislation. The first results will be seen after some countries get benefits in the form of tax revenue or increased investments. Before that, the whole cryptocurrency industry will remain in the mist.