The rapid growth in the digital economy market is primarily caused by the fact that cryptocurrency has become a global trend. The swift expansion of the crypto market is giving rise to a lot of regional authorities to struggle with their monetary regulation system. The availability of a broader set of information on how each jurisdiction is handling the rapidly growing crypto market makes it evident to identify the causes of emerging patterns in the world economy.
The terminology describing the cryptocurrencies varies from one jurisdiction to another. Whereas nothing changes with that they are all coming under one type of decentralized technology known as the blockchain.
Some countries such as Argentina, Thailand, and Australia use the term “digital currency” to refer to cryptocurrency, whereas countries like Canada, China, and Taiwan call it “virtual commodity.” People in Germany and Switzerland call it “crypto-token” and “payment-token” respectively. The Italians and Lebanese have named it “cyber currency” and its called “virtual asset” in Honduras and Mexico.
WHY NOT CRYPTO!
The most common dilemma that the jurisdictions argue about is the risk of investments made in the cryptocurrencies. It’s mostly the Central Banks that are issuing such warnings to educate the citizens to make them familiar about the difference between actual currencies that are issued by the state, and cryptocurrencies which is not a centrally authorized form of currency.
Some countries have gone further to an extent to ban the cryptocurrency and restrict the citizens to make investments. Also, the jurisdiction has been imposing the ban on not just the citizens but imposing indirect restrictions by barring financial institutions within their borders. The countrymen are not allowed to facilitate transactions involving crypto.
Warnings issued by a lot of other countries note that the cryptocurrencies are involved in giving rise to illegal activities such as money laundering and terrorism. As per previous reports, countries have expanded laws on money laundering, counterterrorism. Countries like, Australia, Canada, and the Isle of Man recently passed laws to catch cryptocurrency transactions and institutions that facilitate them under the bound of money laundering and counter-terrorist financing laws.
A Ray of Hope for the Crypto Industry
Not all countries consider blockchain technology and cryptocurrency as a threat due to various different reasons. Countries like Luxembourg, Belarus, Spain, and the Cayman Islands focus on the potential of the blockchain technology and not on the legality of the currency.
They believe that this decentralized monetary system can act as a means to attract investments in the technology companies that have been excelling in this sector. On the contrary, countries like the Marshall Islands, Venezuela, and many others are seeking to go even further and develop their own system of cryptocurrencies.
There are a limited number of countries that have regulated initial coin offerings (ICO) which use cryptocurrency as a medium to raise funds whereas there are few who want to ban crypto altogether. In most cases, the regulation of ICOs and the relevant regulatory institutions depends on how the ICO is categorized. For example in New Zealand, there can be particular obligations that may apply, but that will depend on whether the token offered is categorized in debt security, equity security, managed investment product, or a derivative.
India Enters The Crypto Race; RBI Lifts The Ban
Recently, the Supreme Court of India made an announcement to abolish the ban by RBI on cryptocurrency in India and allow trading of virtual currencies such as Bitcoin. It was a relief for the traders and investors of the crypto market as the RBI restricted the lenders from making transactions in the cryptocurrency.
Korean Parliament Passed the Bill; Crypto Now Legal In South Korea
Following the footsteps of India on legalizing cryptocurrency trading after passing a new amendment, even East Asian nations are making digital assets completely legal. Cryptocurrency trading is now entirely legal system for the South Korean government. The enactment process will still take a year from the date of signing to begin, further followed by a 6-month grace period.
What’s The Future Prospect?
Cryptocurrencies are digital currencies that use encryption techniques to control the generation of units of currency and verify the transfer of funds which have been independently operating via central banks. The largest and the most popular cryptocurrency has been gaining an appreciation for almost half of the year this time. Since October, it has touched the mark of $10,000 against the US dollar.
Many regulators around the world have warned against trading in Bitcoin whereas some countries have already legalized it. It is still uncertain how long Bitcoin will continue to get the hype. It has been in news ever since it came into existence followed by various bans, speculation, and rumors. For some other reasons, cryptocurrency has been the talk of the town. Since the uncertainty prevails, economists, central bankers, finance ministers from around the world have been either encouraging or warning the investors.