The world of cryptocurrencies is an exciting space, however, it does need some kind of framework to protect investors. This is regulation, which prevents projects to exploit users and grants investors legitimacy and transparency through various audits and compulsory frameworks. In this article, we’ll discover where the world’s key regions stand in terms of crypto regulation, and what’s ahead for this important, but often overlooked subject.

About Crypto Regulation In General

Crypto regulation generally means two things. For one, it means the compulsory licenses cryptocurrency exchanges need to obtain in order to operate, as well as the general regulatory framework they need to comply with to function legally.

The other meaning is aimed at framing the way crypto assets are classified and handled by individuals and organizations alike. This usually includes the tax situation about the asset class, and all the implications of holding, purchasing, selling, or transacting cryptocurrencies. With that said, let’s take a closer look at each major region’s regulatory status.

Crypto Regulation In The United States of America

Starting off with the USA, where cryptocurrencies are heavily regulated by central financial authorities. This means that crypto exchanges need to keep detailed records of all their transactions, regularly submit them to authorities for supervision, and implement various programs such as AML/CFT. All this falls under the Bank Secrecy Act (BSA) which contains even more points to follow.

From the individuals’ standpoint, crypto assets are considered property and not foreign currencies. Also, if they lack proper utility, and if various other criteria are fulfilled, crypto tokens can be classified as securities and fall under the supervision of the U.S. Securities and Exchange Commission (SEC).

Crypto Regulation In The European Union

In the European Union, crypto regulation has been lagging on a collective level. That is until recently, when the lawmaker body of the region finally agreed on a comprehensive regulatory package that would bring an end to the unregulated crypto scene. The bill titled Markets in Crypto-Assets (MiCA) attempts to cover all aspects of crypto regulation and handling, both from an organizational and individual point of view. As the bill is yet to be finalized, all details are subject to change.

On another note, taxation varies from country to country, as some allow 0% tax on crypto gains, others can impose as high as 50% on the same type of profit.

Crypto Regulation In The Middle East

Crypto regulation in the Middle East is a bit tougher, as many countries are yet to establish a clear regulatory framework about these novel digital assets. The United Arab Emirates and Bahrain are in the forefront of crypto regulation, as both countries have an exhaustive regulatory framework in place.

Crypto Regulation In Asia

Crypto assets have the toughest job in some Asian countries, such as China, where almost all crypto-related actions are banned, save holding the tokens. However, other countries, like South Korea, or Japan, have solid frameworks in place that solidify the standing, role, and classification of crypto assets.

Ending Remarks 

Overall, the world’s regions are slowly but surely regulating crypto assets. Despite the way this sounds, it is actually positive news for cryptocurrencies, as regulation is not only here to protect investors, but also to legitimize tokens in order to potentially attract more conservative individuals to the sphere. In any case, it will be interesting to follow the events of the next few months, as many major lawmakers are set to finalize their frameworks during that time.