A cryptocurrency is a digital asset designed to work as a medium of exchange using cryptography to secure the transactions and to control the creation of additional units of the currency. Cryptocurrencies have been around since the 1980s but since Bitcoin became the first decentralized cryptocurrency in 2009, numerous cryptocurrencies have been created.
Bitcoin and other cryptocurrencies have risen almost 800% this year in acceptance and use, creating a cryptocurrency investment boom. The market cap has risen above $162.5 billion in spite of the fact there were no big gains in Litecoin, Monero, or Dash, some of the more popular alternative cryptocurrencies among traders. Bitcoin and Ether are averaging prices of $4,537.98 and $338.51 respectively as of recent, which is slightly above BTC’s recent high of $4,500 and below Ether’s recent high of $400.
Despite the fact that cryptos have gained significant traction over the last half decade, they have been seen as a disruption for the traditional banking and financial institutions, at the same time creating a regulatory drama for banking regulators all over the world. Governments and their regulatory bodies have been looking for measures to either regulate the growth of cryptocurrencies or let them roam the economy. The acceptability of cryptocurrencies as a legal instrument currently varies from country to country-some are in the process of formulating laws and measures, others are yet to respond to this disruptive change. The sprouting use of cryptocurrencies illegally has cautioned the security and law enforcement agencies. The Reserve Bank of India issued an advisory in regard to the use of cryptocurrencies, cautioning users, holders, and traders of virtual currencies to their potential financial, legal, and security related risks. The Ministry of Finance also held a public consultation on regulating virtual currencies in May 2017.
Countries That Accept And Regulate Cryptocurrencies:
Estonia accepts the use of cryptocurrencies and its related innovations such as blockchain technology. The country now has a number of bitcoin ATMs, as well as several start-ups that use bitcoin as a currency, such as Paxful. It was also one of the first to use a blockchain-based e-voting service that enables people to become shareholders of Nasdaq’s Tallinn Stock Exchange.
The US has the largest bitcoin trading volume in the world. Since 2013, the U.S. Treasury has classified bitcoin as a convertible, decentralized, virtual currency. The Commodity Futures Trading Commission classified bitcoin as a commodity in September 2015. As for the IRS, bitcoin is taxed as a property. A federal judge ruled in September 2016 that Bitcoins fall under the definition of funds.
The country is quickly accepting Bitcoin as a means of exchange and also as an investment. There are no laws in South Korea that regulate a Bitcoin’s use; however, authorities prosecute illegal activity involving Bitcoin. The country hosts regular Bitcoin conferences and those who wish to use the currency are welcomed.
Hong Kong is excited about cryptocurrencies. The Hong Kong Monetary Authority (HKMA) does not regulate Bitcoin. With the opportunity in mind, the country has the world’s second Bitcoin ATM by Robocoin after it first launched in Canada.
Australia recently moved to remove “double taxation” on Bitcoin despite major banks being rather hostile towards the digital currency. Australia classifies bitcoin as property and therefore purchases made with bitcoin as barter. The Australia Post will also consider using distributed ledger technology to store digital identities in an effort to improve services, and reverse falling revenue.
Countries With Either No Stance, No Solid Stance, Or Negative Stances On Digital Currencies:
Russia is exploring ways to regulate bitcoin and even questions it being considered as a virtual currency with the Russian Central Bank and regulatory systems trying to internalize Bitcoin. Russia views bitcoin as a digital asset and hence regulates it as such. However, the authorities hope to recognize bitcoin and other cryptocurrencies as a legal financial instrument in 2018 in a bid to tackle money laundering. It had formerly marked Bitcoin as illegal, but since then seems to have loosened up, and may be writing new laws concerning it. The country has shown great interest with Ethereum.
The Central Bank of Nigeria passed a report on the 17th of January, 2017, to inform all Nigerian banks that bank transactions in bitcoin and other virtual currencies had been banned in Nigeria. However, during the year, the country redressed its stance on bitcoin noting the Central bank cannot control or regulate blockchain, although the Central Bank of Nigeria and the Nigeria Deposit Insurance Corporation looks into the possibility of the country adopting the technology which is driving Bitcoin and other digital currencies.
The Indian government did warn the public of the dangers involved with Bitcoin. Following the warning, Indian Bitcoin exchanges suspended operations after a raid on the country’s largest exchange Buysellbitco.in. In 2014, the Reserve Bank of India stated that it had no intention of regulating Bitcoins. The Indian tax authorities seem interested to tax Bitcoin.
The government of Jordan discourages the use of bitcoin and other similar systems. The Central Bank of Jordan prohibits banks, currency exchanges, financial companies, and payment service companies from dealing in bitcoins or other digital currencies. While it has warned the public of the risks of bitcoins, and that it is not legal tender, Bitcoin is still accepted by some vendors.
The Central Bank of Iceland does not have the authorization to purchase foreign currency from financial institutions or to transfer foreign currency across borders on the basis of transactions with virtual currency. Transactions with virtual currency are subject to restrictions. However, this does not stop businesses in Iceland from mining bitcoins, but simply from not buying bitcoins from a foreign exchange. On March 12th, 2017, the Central Bank granted wide and general exemptions from the restrictions of the Foreign Exchange Act No. 87/1992.
Companies Accepting Cryptocurrencies:
Overstock.com was the first big online retailer to start accepting bitcoins in January of 2014. Partnering up with Coinbase, one of the most popular Bitcoin exchanges, the company allows its customers to pay for everything, even laptops, televisions, and other items with bitcoins.
Since December of 2014, Microsoft users have been able to use their bitcoins to purchase content in the Windows and Xbox stores. Microsoft recently announced that it was adapting Excel 2017 so users can calculate, format, and analyze Bitcoin on the platform.
Ripple Gateway Pte Ltd, the operator of Ripple Singapore, is the first ripple gateway in Singapore but also the first ripple Gold & Silver gateway. It enables customers to deposit and withdraw Gold, Silver, and currencies into and out of the ripple payment network.
Quantified Assets is a private investment company in Singapore offering tailored education and services for saving and trading in physical precious metals and cryptocurrencies like Bitcoin.
Shopify is an e-commerce platform that allows merchants to set up their own online shops to sell their products, similar to Etsy or eBay. In November of 2013, all 75,000+ Shopify merchants received the option to start accepting Bitcoin payments with the help of BitPay.
At the moment, cryptocurrencies are only popular as a speculative instrument, and as a new trend with the integration of blockchain technology. Many governments, banking institutions, and companies are gearing up to accept and legalize cryptocurrencies to become full-fledged currencies.