As India prepares to regulate cryptocurrencies trade, there is growing concern about the possible fallout of the move on this burgeoning and volatile industry. The winter session of Parliament will begin on November 29 to regulate criptocurrency trade in the country. The market for cryptocurrencies saw a steep crash earlier this week, but it has stabilized since. It's a good time to reflect on how this highly speculative industry is regulated around the world.
Like India, the US has a dual system of governance under which laws vary from state to state. The sentiment is positive towards the trading community, despite the fact that each American state has its own laws to regulate cryptocurrencies. The US is known to support business opportunities, so a ban on cripto trading is highly unlikely to happen unless this industry causes unmanageable risks to the existing financial system.
The UK has not formulated comprehensive legislation on cryptocurrencies, as is the case with most countries. It grants licenses to business dealing in crypto trading for example online exchanges. It taxes gains from these trades like any other gains from currency trading.
It's a hard to do in China because of the difficulty of criptocurrency trading. After initially allowing people to trade or mine cryptocurrencies, it started a crack down on mining activities earlier this year and imposed a ban on the trade in June. Reports say that most miners of significant infrastructure had to move out of the country to continue their operations. China is testing the centrally regulated coin and is working on a digital version of its currency, Yuan.
After the exit of the UK forming legislation that applies to all members is complicated, as a group of 27 member countries. The block as a whole is considering a collective approach, despite the fact that member countries have their own framework on how to deal with this emerging industry. The European Commission released the draft Markets in Crypto-Assets Regulation MiCA legislation in September 2020. The legislation will treat cryptocurrencies as financial instruments that require approval from regulators when it comes into effect.
President Nayib Bukele has positionedBitcoin as a way to reduce poverty and bring more people into the banking network. The roll out ofBitcoin was fraught with problems.