On March 5, the Supreme Court, previously enacted by the Reserve Bank of India (RBI), lifted a two-year ban on cryptocurrency transactions.
Since February last year, the Indian government has been working on a draft bill that would explicitly ban cryptocurrencies other than state-issued ones. An Indian Inter-Ministerial Committee (IMC) has drafted the “Prohibition of Cryptocurrencies and Official Digital Currencies Regulations 2019,” tasked with studying various aspects of cryptocurrencies and advising on crypto policy in India. The IMC is headed by India's former finance minister, Subhash Chandra Garg, who has since resigned from that role. Still, he sees a “short future” for cryptocurrencies, arguing that they are “essentially worthless code.”
According to Beishu Blockchain, Indian regulators have always been opposed to cryptocurrencies. In July last year, Reuters released news that a panel of Indian experts recommended prohibiting the public from trading cryptocurrencies and plans to impose up to 10 years in prison and heavy fines on any individual who engages in cryptocurrency transactions.
After two years, the Supreme Court of India overturned the ban, which not only means that cryptocurrency companies can regain access to banking services, but also is expected to activate the market potential of India’s population of over one billion.
Needless to say, this is a historic day for the crypto community and India as a whole. What can India's deregulation bring to cryptocurrencies?
First of all, India is a country with a large population and a high proportion of young people, making it easier to become users of cryptocurrencies. At present, there are tens of millions of users of cryptocurrencies all over the world, and new users in India can bring exponential growth to cryptocurrencies.
Secondly, it can bring huge funds. In 2019, private equity investment in India reached a record high of $37 billion. Among them, there are 74 transactions with a single transaction value exceeding US$100 million. With China's economic growth slowing, India has become a mecca for global venture capital. Due to its token attributes, the cryptocurrency industry has more diversified and convenient ways of venture capital investment. The deregulation in India will bring huge money to the entire cryptocurrency industry.
Finally, there will be more developer participation. India has cultivated the most software R&D engineers in the world, and many CEOs and executives of top Internet companies in the United States are of Indian descent. India has been home to Github's third largest community, growing by 22% over the past year, with public repositories growing by 75%. The influx of more developers into the cryptocurrency industry will promote the rapid development of industry technology and a closer integration with the real economy.
However, cryptocurrency is a new thing after all. Different countries have different degrees of market openness, financial regulatory capabilities, and regulatory focus. Therefore, each country's understanding of cryptocurrency, regulatory focus, regulatory content, and regulatory strength are also different. However, all major countries in the world have listed the regulation of cryptocurrencies as the focus of their current work.
1. China
In December 2013, the People's Bank of China, the Ministry of Industry and Information Technology, the China Banking Regulatory Commission, the China Securities Regulatory Commission, and the China Insurance Regulatory Commission jointly issued the "Notice on Preventing Bitcoin Risks" (Yinfa [2013] 289). The notice clarifies the nature of Bitcoin, and believes that Bitcoin is not issued by monetary authorities, does not have currency attributes such as legal compensation and mandatory, and is not a real currency. Ordinary people have the freedom to participate at their own risk. .
Since the beginning of 2017, seven ministries and commissions jointly issued the "Announcement on Preventing Financing Risks of Token Issuance" in September of that year. The announcement determined that "token issuance financing refers to the financing subject raising so-called 'virtual currencies' such as Bitcoin and Ethereum from investors through the illegal sale and circulation of tokens, which is essentially an illegal public financing without approval. Behavior, suspected of illegal and criminal activities such as illegal sale of token coupons, illegal issuance of securities, illegal fundraising, financial fraud, and pyramid schemes.”
In November 2019, the Shenzhen Local Financial Supervision and Administration Bureau issued a notice on its official website "Risk Reminders on Preventing Illegal Activities of "Virtual Currency"", stating that "the hype of virtual currency has been on the rise recently due to the promotion and publicity of blockchain technology." , some illegal activities show signs of resurgence.”
2. United States
According to the latest "Cryptocurrency Act of 2020" in the United States, its preliminary discussion is as follows.
In 2019, the U.S. SEC issued guidelines to determine the legality of digital currency securities, and issued multiple warnings against fraudulent encrypted asset trading websites and the encryption industry.
Since the end of May, the US Internal Revenue Service has started to regulate the taxation of cryptocurrency transactions.
In June, the IRS identified several tax-specific issues with cryptocurrency transactions and began reviewing taxpayers’ cryptocurrency holdings in late June.
In October, the U.S. Internal Revenue Service released its first cryptocurrency tax guide in five years, and said it may increase audits of cryptocurrency traders. At the end of the year, the US Internal Revenue Service issued taxation guidance on cryptocurrency forks.
3. Japan
In April 2018, 16 Japanese licensed exchanges jointly established the self-regulatory agency "Japanese Cryptocurrency Exchange Association". In addition to formulating relevant industry standards, the association will also work with the Japanese Financial Services Agency to draft and Guidelines for setting up an initial token offering.
In March 2019, according to the content of the “Research Report on the Virtual Currency Exchange Industry” published by the Japan Financial Services Agency, the “Suggestions on New ICO Supervision” was put forward.
In May 2019, Japan passed the amendments to the Fund Settlement Law and the Gold Merchant Law, amending the Fund Settlement Law and the Revised Financial Instruments and Exchange Law. The revisions include the creation of virtual currency trading rules without clear restrictions, and prohibition of market manipulation; The addition of virtual currencies to the provisions of the Commodity Exchange Act will limit speculative trading.
4. South Korea
The South Korean government has been re-examining its stance on cryptocurrencies, and people have been waiting with bated breath for the latest developments in South Korea.
South Korea’s Fair Trade Commission (FTC) has asked cryptocurrency brokers to revise their contracts in an effort to combat fraud. There are also reports that in June 2018, South Korea will establish a tax scheme for cryptocurrencies. However, the newly appointed head of the Financial Supervisory Authority stated that he is in favor of more flexible legislation on cryptocurrencies.
South Korea is now one of the most active markets for cryptocurrency speculation. But according to The Korea Times, there is no direct framework for taxing capital gains from the sale of digital assets. The Ministry of Economy and Finance is working on the measure, which will become a tax bill from next year. The South Korean government may start taxing cryptocurrency capital gains in 2020.
But some countries have directly exempted cryptocurrencies from taxation.
1. Germany
Germany has already exempted Bitcoin transactions from value-added tax, and since German law clearly states that Bitcoin is not a currency, the tax exemption for assets held for more than one year also applies to Bitcoin.
And thanks to the asset's exemption, you also don't need to pay taxes on bitcoin gains as capital gains. But for enterprises, the income from investing in cryptocurrencies still needs to pay corporate income tax.
2. Singapore
If a business in Singapore buys and sells cryptocurrencies in its business activities, the gains from cryptocurrencies are subject to taxation as ordinary income. However, Singapore companies and individuals who hold cryptocurrencies for long-term investment purposes do not need to pay taxes because the Singapore government does not levy capital gains tax (CGT).
3. Malaysia
Like neighboring Singapore, the Malaysian government does not impose a capital gains tax. While there are rumors that the Malaysian government will introduce a capital gains tax in the future, no such proposal has yet emerged in the latest 2019 government budget. As it stands, cryptocurrency transactions in Malaysia are tax-free.
4. Switzerland
Switzerland is known around the world for its cryptocurrency friendliness, so much so that some say Switzerland is the Silicon Valley of the crypto world, or “Crypto Valley” for short. The Ethereum Foundation and the Libra Association, a member organization of the now-hot Facebook cryptocurrency Libra, are both headquartered in Switzerland.
There are also some Southeast Asian countries that have also given policy advantages to cryptocurrencies.
1. Singapore uses its policy advantages to attract a large number of blockchain start-up projects;
2. Vietnam shifts its focus to the application of blockchain in the field of digital currency;
3. After Thailand’s ICO was legally approved, the financial sector and banks began to deploy;
4. Indonesia has focused on realizing the application of blockchain in multiple fields at the same time;
What are the landing projects of cryptocurrency
1. On September 23, 2019, Contentos, a global decentralized digital content community in the United States, announced a partnership with Crypto.com. Now you can purchase Contentos’ COS tokens on Crypto.com’s mobile app, and COS can also be exchanged for legal tender. Spend at over 40 million merchants worldwide.
Users can trade COS on the Crypto.com mobile app in the Apple App Store and Google Play. COS will be launched together with Bitcoin, Ethereum, Monaco, CRO (Crypto.com platform token) and other mainstream cryptocurrencies. Qualified users can also exchange COS into legal tender by registering the MCO VISA card. MCO VISA cardholders can also earn rewards and cash back on spending on platforms such as Netflix, Spotify, Airbnb and Expedia.
2. In June 2019, the Big Four audit firm PricewaterhouseCoopers announced the launch of cryptocurrency audit solution software.
The tools of the newly added PwC Halo audit suite can be used to “provide assurance services for entities engaged in cryptocurrency transactions.” Through this software, the Halo suite allows PwC to provide independent evidence of private – public confidential Key pairing (used to establish ownership of cryptoassets) and collect relevant transaction and balance information from the blockchain.
PwC further noted that it has adopted new tools to support audits of clients involving cryptocurrencies and to assist firms that are not audit firms to implement the processes and controls necessary to obtain assurance reports from auditors.
3. On June 18, 2019, the American social network giant Facebook officially released a new encrypted digital currency "Libra" (Libra), with the goal of becoming a global currency.
The difference between libra and traditional bitcoin or ethereum is that libra wants to establish a low-volatility currency. The reason why it is difficult for bitcoin to enter the daily life of ordinary people has a great impact on the volatility of bitcoin prices. This makes Bitcoin can only exist as an asset that can be hyped, and cannot enter life at all.
Shortly after the project was announced in June, the opposition grew as lawmakers around the world raised concerns about its impact on financial markets, cybercrime and consumer privacy.
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