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Not surprisingly, several tokens have circumvented existing regulations by declaring themselves utility tokens. Such startups have been publicly rebuked, but that has not stopped tokens with questionable business models from being listed on exchanges outside their native countries. The case of bitcoin exchanges in China, which promptly relocated to neighboring countries following a trading ban, is also illustrative of the problems faced by regulators. In response, international agencies such as the International Monetary Fund (IMF) have called for an international discussion and cooperation among regulators as far as cryptocurrencies are concerned. The EU, which has been welcoming of the cryptocurrency revolution, may possess an advantage over other territories because it controls a 28-member bloc. In the United States, a non-profit, the Uniform Law Commission, formulated the Virtual Currency Businesses Act (VCBA) in an attempt to unify disparate state laws and provide entrepreneurs with “certain assurances with respect to the regulatory landscape.” According to the latest release in November 2020, the law has been introduced in four states, though only the state of Rhode Island has committed to adopting VCBA, so far. Dealing With the Bitcoin Regulatory Platypus. In an interview with American Banker, Marco Santori, former head of blockchain practice at law firm Cooley, called bitcoin a “regulatory platypus,” one that doesn’t fit neatly into established asset categories. But the platypus may not be such a big problem for taxation purposes within the United States. As Perry Woodin from Node40 points out, publicly-listed stocks are also managed by multiple agencies. “Government authorities can and should apply existing regulations to cryptocurrency,” he says. “But I don’t see a need to create cryptocurrency-specific regulation.” Some countries, notably in Asia, are pointers in ways to deal with cryptocurrencies. The clearest indication of future policy for the region regarding regulation may come from Japan, which said cryptocurrencies may one day become legal tender in 2017. South Korea also recently announced that any cryptocurrency profits over 2.5 million South Korean won will be taxed at 20%, which is estimated to take effect in 2022. The Japanese government passed a Virtual Currency Act, which defines and describes cryptocurrencies. They are treated as assets for accounting purposes. As part of the act, the government issues a list of approved virtual currencies, which are considered legitimate and can be transacted on (i.e., traded, sold, or promoted to the public). While there were concerns initially that altcoins might be left out of the official list, that has not happened. Note that El Salvador became the first country (in June 2021) in the world to accept bitcoin as legal tender. Startups planning an ICO are also required to obtain a license that establishes a minimum set of requirements and disclosures for the offering. Finally, exchanges are also subject to capital requirements, strict IT compliance checks, and regulations about KYC (Know Your Customer). To achieve these changes, Japan amended its Payment Service Act. To be sure, the task is much easier in Japan since the country has only one agency, the Financial Services Agency, to operationalize the changes. The problem bitcoin solves, stellar us dollar exchange rate. Sep 22, 2017 · 4 min read. 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Market capitalization: $ 2047 billion (+ 4.7%) 🔺 (against $ 2036 billion yesterday morning).
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