Last week, Indian lawmakers made a jaw-dropping proposal to imprison Indian citizens who are involved with crypto. They are suggesting a 10-year sentence for everyone who mines, buys, sells, and even holds and deals with crypto in some way or another. If this unconventional proposal comes through, anyone who holds cryptocurrency would have to get rid of it as dictated by the state. That does sound a lot like a crypto protagonist’s worst nightmare, and it has left a lot of people wondering.
It is a common practice for governments worldwide to warn their citizens about the risks of crypto trading, but at the end of the day it all comes down to your personal common sense anyway. If you lose, well, it’s your loss, you should take responsibility for it and next time think twice before playing the odds. Surprisingly, the Indian government has decided to take it a step further so that if you’re careless with crypto, money won’t be the most precious thing you lose. You would be risking your freedom here. It seems like quite the ultimate sanction, so there must be an underlying cause to it.
Is there a connection between a country’s economic level and its attitude towards cryptocurrencies? Does crypto regulation depend on how developed or corrupt a country is?
We’ve decided to investigate these questions and pick several countries at different stages of development to see if a certain pattern of cryptocurrency adoption really exists.
Cryptocurrency Regulation in India
Let’s be honest, India has never supported cryptocurrencies wholeheartedly. The country has a mixed developing economy and corruption is widespread. On top of that, India suffers from the underground economy problem, which might cause these major doubts that the state has developed towards cryptocurrencies.
Judging by the prevailing climate, that’s not exactly a surprise the state is so harsh when it comes to crypto. Apparently, two main issues that the government points out is the source of money that circulates in crypto trading and the difficulties in regulating crypto exchanges. Probably, the country is simply not yet ready to embrace all the advantages that crypto might bring to the table.
Cryptocurrency Regulation in Japan
And then let’s take a look at another Asian country. The economy of Japan is highly developed and market-oriented. In fact, it is the world’s second largest developed economy. On top of that, Japan is the 18th least corrupt nation. It’s interesting that cryptocurrency exchanges are strictly regulated businesses in the country, as the government strives to do both: support the crypto industry and at the same time protect its citizens. Japan, true to its main principles, has taken a rational approach: capture the full benefits of the trendsetting technology.
Cryptocurrency Regulation in China
China’s socialist market economy is a tricky one. Being the world’s biggest trading nation, the country has to stay open-minded and flexible. On the other hand, the country’s struggling with corruption and the government always remains extremely controlling, especially when it comes to financial matters and trying to keep the money from flowing overseas. This explains why the Chinese authorities have always been rather welcoming towards blockchain technology, but not so friendly to cryptocurrencies in general.
Currently, Chinese citizens are allowed to own crypto but not allowed to trade it. Recently the news about National Development and Reform Commission thoughts on banning mining once again have shaken the crypto community. Such measures would definitely have a huge impact on the crypto industry worldwide, as China has always been the mining rockstar. Whether these changes are going to be positive or not so much, that’s a whole different story.
Cryptocurrency Regulation in the US
The US is definitely one of the cryptocurrency friendly countries. The country with the world’s largest highly developed mixed economy is also an advanced-technology innovator. The USA is also the 22nd least corrupt nation. Obviously, the combination of these factors creates a receptive atmosphere for the development of the cryptocurrency and blockchain industries. A lot of big enterprises such as Microsoft, Expedia, and many others accept payments in Bitcoins and this definitely contributes to the diverse ecosystem. Although the regulation and legislation systems are still far from perfect, authorities make a lot of effort and suggestions hoping to work out an ultimate strategy, and have already figured out the taxation issue.
Cryptocurrency Regulation in the UK
The United Kingdom, with its highly developed and market-oriented economy, still contemplates the legal status of Bitcoin and other crypto. However, considering the fact that London is the world’s largest financial center, most likely it’s not going to be long until the country announces its official position towards cryptocurrencies. As of now, the British government is making steps towards regulation primarily targeting crypto exchanges and developing proper due diligence that will cover AML, KYC, and CTF policies.
Cryptocurrency Regulation in South Africa
The vast majority of African countries stay crypto neutral. The governments tend to warn their citizens about the risks of trading crypto and possible financial losses and urge them to be particularly cautious when dealing with virtual currencies.
South Africa’s economy is the second largest in Africa, however, the corruption level is pretty high over there. At the beginning of 2019, the government established a special working group to research the crypto industry and propose a regulation policy. Currently, South African crypto legislation still stays in limbo with only one amendment: the government applies normal income tax rules to digital assets.
Cryptocurrency Regulation in Malaysia
In Southeast Asia, the Malaysian economy is the third largest and actually, the country itself is pretty competitive. Kuala Lumpur is famous for its financial sector, and Malaysia is also a center of Islamic Finance.
When it comes to crypto, the country is completely and utterly cautious, but still relatively open-minded, mainly focusing on transparency and the security of its citizens. In Malaysia, cryptocurrencies are classified as securities. The government understands the possible benefits the crypto industry might bring, thus requiring exchanges to register with the Securities Commission. If approved, the exchanges then have to make sure they fit the required standards. The commission is also actively figuring out ways to manage ICO activities.
Favoring control over banning cryptocurrency seems to be the prerogative of developed countries. The most prosperous states tend to consider the substantial improvements that the crypto and blockchain industries might bring.
Developing countries, in turn, often avoid the issue and advise their citizens to stay away from cryptocurrencies, fearing the unknown, and sometimes go as far as banning crypto altogether. The Indian jail sentence proposal is an extreme measure, and one can only hope that it will never be accepted. Luckily, it’s people who form governments, and people have a habit of changing their minds.
But if we think about it thoroughly, it’s not even about the countries approving or disapproving cryptocurrencies. What is more important is which side they are on. Do they only care about bureaucrats, so they can continue to live off corruption? Or do they protect citizens and open new doors for crypto business?