Crypto assets have become more popular in recent years and this developing popularity led to the need for a global cryptocurrency regulation. Regulations are not necessarily bad considering that they can further ensure the safety of using cryptocurrencies, although having the same regulation for thousands of different crypto companies can be a bit of a challenge.
Regulations can bring a lot of better conditions to both companies and regular users. There are many examples of regulations working well in many countries, but it does not mean that the regulations that work for one country could be successful in another.
Australia crypto regulation
Before 2017, cryptocurrencies were subject to double taxation under Australia’s goods and services tax. Since the regulations have been put in place, the Australian government declared that crypto should be treated as property, and subject to a Capital Gains Tax. This progressive attitude towards crypto creates a more equal environment compared to before.
In 2018, it was announced that Australia was working on other regulations as well. The new regulations require crypto companies to register as AUSTRAC. They also have to identify and verify users, maintain records, as well as comply with the AML/CFT obligations.
These regulations work very well in Australia but saying that they would be as successful in other countries is impossible. This market is very diverse around the world and this makes it hard to find one global cryptocurrency regulation.
For example, the regulations in the US vary from state to state. Even the description of crypto is different in several states. So, having a universal regulation here would not make any sense. The Justice Department works very hard with the SEC and the CFTC to come up with regulations that could ensure consumer safety.
Canada has an even more confusing attitude towards crypto. It is not a legal tender, but you can still legally exchange the currency. Starting from June 1st, all exchanges will have to register with the Financial Transactions and Reports Analysis Centre of Canada, FINTRAC.
In Japan, crypto is very much legal, and much like Australia, it is treated as property. But keep in mind that Japan is considered to be one of the most progressive when it comes to crypto. Japan is one of the biggest crypto markets in the world, and in 2017 it was ruled that crypto would be categorized as miscellaneous income and the tax would amount to 15%-55%.
There is a very friendly environment for crypto in Japan, but growing AML concerns could lead to additional regulations in the country. Also, after the talks between exchanges and the FSA, an agreement was put in place. A self-regulatory body will be formed in Japan. The Japanese Virtual Currency Exchange Association, JVCEA, is going to be the first of its kind in the world. This will ensure further development of crypto not only in the country but in the region as well.
Cryptocurrencies are legal in Switzerland, and they are also accepted as payment methods in some contexts. Exchanging them is also legal, but it is regulated by the SFTA. The Swiss Federal Tax Administration considers cryptocurrencies to be assets. They are subject to the Swiss wealth tax. Citizens must declare them during the annual tax return.
In order to operate, crypto exchanges need to obtain a license from the Swiss Financial Market Supervisory Authority. For the future, Switzerland’s government said that the country plans to continue its friendly attitude towards crypto. The government even works hard to encourage innovations in blockchain technology.
When it comes to South Korea, crypto is not considered to be a legal tender, but you can still exchange it under the closely-monitored regulatory system. Currently, they are considered to be neither currency nor financial assets, so crypto transactions are tax-free.
The Ministry of Strategy and Finance, however, announced that they are working on a new taxing system and starting from 2020, crypto transactions might be taxed.
The diversity of attitudes towards cryptocurrencies from different countries makes it almost impossible to have a global regulation. It is never a good idea to take a regulation or part of if from some country and try to fit it to another since you never know how will it work with specific legislations.
The crypto market is still developing and it is changing very fast. Finding the best regulation is crucial since they can get in the way of development. Knowing the world market is what can help when it comes to crypto.
Crypto regulation doesn’t have to be a bad thing, and Australia is one of the greatest examples of that. Many countries can learn from the regulations adopted by Australia, but using their regulations for their own markets isn’t a rational idea. Having the same regulations for countries like Australia, Japan, the US, and many others is not logical and it would not work.