China, Russia and US: How Do Key Jurisdictions Deal with Cryptocurrencies
Decentralized digital currencies actually don’t need states, governments and banks to exist. It’s difficult to control this new kind of assets and, respectively, traditional economies and jurisdictions worry about that. However, many of them, also see the potential of blockchain and digital currencies and don’t want to stay away completely. So what do major jurisdictions think about digital currencies? Russia Russia has complex relations with cryptocurrencies. The government is, indeed, not happy with uncontrolled and anonymous money transfers, but also doesn’t want to miss this contemporary trend. In 2014, the Russian central bank called bitcoin “quasi-money” and claimed it was used to breach anti-money laundry and tax laws. This year Russian Finance Ministry drafted a new bill to finally regulate cryptocurrency issue. The draft bill legalizes the term “digital financial asset” as an electronic encrypted security. Besides, it defines the legal status of tokens and bitcoin mining, which is considered an entrepreneurial activity. So, Russian miners will have to incorporate as a legal entity or register as self-employed persons. The Finance Ministry also wants to license cryptocurrency exchanges. Though, it seems to be too much regulations, many believe these changes will be quite positive. The United States The US is a great part of cryptocurrency market, though the government seems to be not very happy about that. There are some regulations already established, however, the crypto-policy is not yet determined. As White House cybersecurity coordinator Rob Joyce told CNBC, "general regulation of cryptocurrencies is not yet “close,” as they are still in the “studying and understanding” stage". The government seeks to protect investors, as well as prevent the use of digital assets for illicit activities. In 2014, the US Internal Revenue Service ruled to treat bitcoin as property for tax purposes, meaning it would be subject to capital gains tax. There are also discussion on the creation of a special body in charge of cryptocurrencies. Generally, there's quite a big lobby in favor of reasonable regulations, thus, some senators claim it is necessary to protect customers without trying to squash innovation. Currently the main issue related to cryptocurrency and especially ICO campaigns is to determine whether a particular coin or token is a security (like stocks) or an utility (like a discount coupon) and, as follows, whether it should be regulated by a strict law on securities or not. China China is also a huge crypto-behemoth that is trying to establish a complete control over digital assets. The government started from banning ICOs and exchanges but ended up freezing crypto-related bank accounts, kicking out BTC miners and implemented a ban on the Internet access to all things connected with cryptocurrency trading. All these measures put China on top of the most strict virtual currency regulators, though, as Bitcoin Magazine writes, “cryptocurrency adoption in China increased at a rate higher than in any other country”. Despite all restrictions, China still remains a major actor of the cryptocurrency market and some crypto enthusiasts believe the new crypto economy will manage to conquer Celestial Empire some day. Subscribe to The Coin Shark news in Telegram