Cryptocurrency: cryptocurrency (Cryptocurrency)To crack down on this, the government is bringing ‘The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021’ in the winter session of Parliament. After getting the approval of this bill from the Parliament, it will take the form of a law, under which the framework for launching the digital currency recognized by the Reserve Bank in the country will be ready.
The bill to be introduced regarding cryptocurrencies proposes to ban all private cryptocurrencies. However, the government may allow investing and trading in some cryptocurrencies. After the news of bringing a bill to ban cryptocurrencies, there was a big drop in the price of cryptocurrencies in local exchanges. It is believed that investors trading in cryptocurrencies started selling in panic due to fear of getting banned. There is no provision to regulate cryptocurrencies in India. Although rules have been made in some countries regarding this, let’s have a look.
How are cryptocurrencies regulated in other countries of the world?
Countries and regulators have different stances regarding cryptocurrencies. Some have been in favor of a complete ban on these assets, while some are in favor of allowing them to operate with regulation. Some countries are in favor of continuing the trading of these virtual currencies in the absence of any guidelines.
Difference between government and regulators
There is a huge difference between governments and regulators about whether cryptocurrency should be considered a currency or a financial asset. Also, there is no mutual agreement on how to control their operations. Countries like El Salvador have allowed bitcoin to be a legal currency, while China has completely banned it. China has strict rules against cryptocurrency and its providers.
India still confused
Countries like India are still confused and want to adopt a middle policy. India is in favor of regulating cryptocurrencies and allowing it by making a policy. In the US and the European Union, the discussion is going on, bypassing the regulatory mandate.
Canada embraces crypto
Among the countries that have not issued detailed regulations, there are some that have recognized and defined these currencies. For example, Canada defines cryptocurrencies as follows under the Money Laundering and Terrorist Financing Regulations. A report by the Thomson Reuters Institute in June of this year stated that Canada has been one of the early adopters of crypto, and the Canada Revenue Authority (CRA) generally considers cryptocurrencies as a commodity for the purposes of the country’s Income Tax Act. Kind of accepts.
Some countries have given recognition
Israel has included virtual currency as a financial asset under its Financial Services Act. Israel’s security regulator considers cryptocurrencies to be a security commodity. At the same time, the tax authority of Israel has imposed a capital gains tax of 25 percent on cryptocurrencies considering cryptocurrencies as financial assets.
The Financial Supervisory Authority of Germany has considered virtual currency as a financial instrument and as units of account. The Bundesbank considers bitcoin to be a crypto token that does not act like a currency. However, citizens of the country or any legal entities can buy and sell cryptocurrencies. However, this can only be done through exchanges or people licensed from the German Federal Financial Supervisory Authority.
US government has not recognized
Cryptocurrencies are not recognized as currency or currency in UNITED KINGDOM. Therefore, it is not recognized as a mode of investment or payment of any kind. Different states in the US have defined cryptocurrencies differently. The US government has not yet recognized cryptocurrencies. Although some states have definitely recognized it on their behalf.
To do business in digital assets in Thailand, a license has to be obtained and it also has the status of financial institutions. Earlier this month, Thailand’s oldest bank Siam Commercial Bank announced it would buy a 51 per cent stake in Bitkub Online, a local cryptocurrency exchange.
Most of these countries have not considered cryptocurrencies to be a legal tender. Although they are fully aware of how much value they have in today’s date. That’s why they consider them as medium of exchange or units of account. Like India, many countries are preparing to launch digital currency through their central bank.
How digital currency will work
RBI is planning to launch its own digital currency. Their transactions can be done through blockchain through wallet. RBI will regulate it. The concept of digital currency is completely inspired by bitcoin. However, it is different from decentralized virtual currency and crypto assets. Decentralized virtual currency and crypto assets are not issued and recognized by any country.
Investors will be able to transact outside the international border with the country as well, with a digital currency recognized by the Central Bank. No third party or bank will be required for this. Many countries are running pilot projects regarding this. If India launches its own digital currency, it will help in increasing the value of rupee in the international financial market. Digital currency will also be virtual currency but different from private digital currency.
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