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Cryptocurrency Regulations

Almost all the countries have issued government notices explaining its citizens the downfalls of putting their money in cryptocurrency markets. They aim to educate the citizens about the level of security provided by government-backed currency and the lack of regulation of crypto firms and exchanges. They also assert the fact that cryptocurrency investments are made at the own risk of an investor and in case of any loss, the government won’t be held responsible.

These warnings are also inclusive of the warnings against illegal activities that can be facilitated by cryptocurrencies like money laundering, counterterrorism, and organized crimes. The government has also instructed banks and other financial institutions that enable the operations of such markets to diligently impose the requirements mentioned under these laws.

Countries like Australia, Canada and the Isle of Man have imposed laws that put cryptocurrency transactions and the organizations facilitating these transactions under the domain of money laundering and counter-terrorist financing laws.

Another question that tags along the cryptocurrency investments and usage is how to levy tax on their profits? It is essential because if we view the profits made from mining or selling cryptocurrencies as income then there needs to applicable tax brackets. For example, Israel taxes cryptocurrencies as asset, Bulgaria as financial asset, Switzerland taxes it as foreign currency, Argentina and Spain subjects it to income tax, Denmark also taxes it as income tax but here the losses are deductible, and in the United Kingdom, corporations pay corporate tax, unincorporated businesses pay the taxes as income tax and individual gains come under the category of capital gains tax.

In the European Union Member States, cryptocurrency investment gains do not fall under the category of value-added tax. It was made so after a decision taken by the European Court of Justice (ECJ) in the year 2015.

However, in most countries, mining of cryptocurrencies is also exempted from taxation. But, in Russia, taxes are levied on miners if the energy consumed by it crosses a certain threshold.

In some jurisdictions like the Swiss Cantons of Zug and a municipality located within Ticino, people and even the government agencies accept cryptocurrency as a mode of payment. Countries like the Isle of Man and Mexico also accepts cryptocurrencies as a mode of payment. In fact, the governments of Antigua and Barbuda permits the funding of various projects and charities through government-supported ICOs, which are just like raising funds by selling government bonds.


European union

In the meeting of the European Commission held on July 5, 2016, a legislative proposal that suggested the amendment of the Fourth Anti-Money Laundering Directive (AMLD) was presented. According to the proposal, a suggestion was made to bring custodian wallet providers and digital currency exchange platforms within the space of AMLD.

It implied that these organizations were obligated to meet the due diligence requirements and have policies and procedures that will be able to identify, safeguard against and report money laundering activities or terrorist financing.

In the same proposal, digital currencies are defined as, “a digital representation of value that is neither issued by a central bank or a public authority, or necessarily attached to a fiat currency, but is accepted by natural or legal persons as a means of payment and can be transferred, stored or traded electronically.”

The proposal was adopted by the European Parliament in a plenary session held on April 19, 2018.

Non-EU Members


Switzerland, a country known for its decentralized economic structure has maintained its progressive attitude towards cryptocurrency regulations as well.

The land-locked country has always been absent from the European Union and it has decided to not keep the same attitude as them by keeping an open mind towards cryptocurrency.


Russia is still uncertain regarding its stance on cryptocurrency regulations. However, in September 2017, the Russian central bank exhibited a negative attitude towards cryptocurrencies. The Russian Federation Central Bank chief Elvira Nabiullina took a stance against regulating cryptocurrencies as a currency, be it national or foreign.

This indicated towards Russia adopting a hands-off approach towards cryptocurrency.


In December 2013, the then-Governor of the Reserve Bank of Australia, Glenn Stevens had given a go-ahead to Australian citizens to freely choose their preferred currency as a medium of exchange and payment.

Later, the Australian Transaction Reports and Analysis Centre (AUSTRAC) published a list of requirements that was mandated for cryptocurrency exchange providers. It was mentioned in the document that the cryptocurrency exchanges were obligated to register with AUSTRAC, verify the customers’ identities, implement and uphold an AML/CTF program to detect and mitigate money laundering, and report to AUSTRAC any activity that triggers suspicion.

These activities were inclusive of any transaction that was made with physical currency amounting to $10,000 or more. Also, the crypto exchanges were mandated to keep records of 7 years. Presently, three crypto exchanges have managed to secure a license from the AUSTRAC.

In general, Australia’s approach towards cryptocurrency is relaxed and people are using Bitcoin in their daily life transactions.



A statement given by Bank of Ghana read, “The Bank of Ghana wishes to notify the general public that these activities in digital currency are currently not licensed under the Payments System Act 2003 (Act 662). The Bank of Ghana is currently investing many resources to enhance further the payments and settlements system, including digital forms of money and also to introduce cybersecurity guidelines to safeguard electronic and online financial transactions.”

This statement clearly indicates towards the non-acceptance of cryptocurrency in the African nation.


However, in Kenya, the usage of cryptocurrencies is quite evident with the nation having the third highest volume of transactions, after South Africa and Nigeria. It is possible that the Central Bank of Kenya is willing to soften its stance on cryptocurrencies since Dr. Patrick Njoroge compared Bitcoin to a pyramid scheme in 2017.

In the year 2018, President Uhuru Kenyatta commanded that a Blockchain and AI taskforce should be formed to explore the implementation of these technologies within Kenya’s prevailing economic framework.

Also, the Capital Markets Authority, Central Bank of Kenya, the Insurance Regulatory Authority, SACCOs Societies Regulatory Authority, and the Retirement Benefits Authority have decided to meet to discuss the regulations of virtual currencies.


Nigeria, the continent’s largest economy, had warned its citizens and local banks against the use of cryptocurrencies and getting in business with cryptocurrency exchanges.

But, after enjoying some economic stability in 2018, the Central Bank of Nigeria’s Head Musa Jimoh, came forward and asserted his intention to look into these digital currencies from a policy standpoint.



India, which was previously seen as a country with a friendly environment for cryptocurrencies has changed its take on them. In 2018, the country had limited acceptance of these virtual currencies.

India has similar concerns as other countries including money laundering, illegal activity proliferation, sponsorship of terrorism, tax evasion, etc.

Although India is facing stern regulations, the local cryptocurrency industries hold the belief that the nation will not “ban” cryptocurrencies in a way China did.


The Monetary Authority of Singapore (MAS), cautioned the citizens of speculation risks in the cryptocurrency markets when the Bitcoin prices were at its peak in December 2017. In the Same month, Singapore’s International Commercial Court heard a trial that was incidental of a Bitcoin trading dispute. Apparently, the trial was about legitimizing the economic stakes in disputes.

A statement made by Singapore’s Deputy Prime Minister Tharman Shanmugaratnam, on 9 January 2018 read “the country’s laws do not make any distinction between transactions conducted using fiat currency, cryptocurrency or other novel ways of transmitting value.”


China’s policies shows its strong non-acceptance of cryptocurrencies. It started with the ban on ICOs, followed by freezing bank accounts that are linked with exchanges and kicking out Bitcoin miners. It ended with implementing a nation-wide ban on everything related to cryptocurrency trading.

China comes across as the most stringent regulator of cryptocurrencies trading when we look at all the major economies. All this comes as a surprise when we look at 2017 data which indicated that 50 percent of the global mining population hailed from China. Also, cryptocurrency adoption in China expanded at a rate higher than any other cryptocurrency.


The United States of America

The United States hasn’t decided on any cryptocurrency regulations yet but are in the process of devising some soon. Like other nations, The Securities and Exchange Commission (SEC) has warned the US investors of the risks involved in cryptocurrency trading. Additionally, the commission has stopped several ICOs and indicated towards the need of having in place proper cryptocurrency regulation.

Steve Mnuchin, Secretary of the Treasury, has shown an inclination towards minted fiat currency over the digital currency. Addressing the people present at the Economic Club in Washington, D.C., on January 12, 2018, the Secretary asserted that he and other regulators were assessing the possibilities of using cryptocurrency in money laundering activities.


The Financial Consumer Agency of Canada has a firm stand against digital assets. They have clearly mentioned that cryptocurrencies won't be accepted as “legal tender’ and only Canadian banknotes and coins will be accepted as an official mode of payment.


Venezuela doesn’t fall in the category of a major world economy and doesn’t form a major portion of the cryptocurrency investing community. However, it is essential to know the regulations of this country because of its noteworthy stance on cryptocurrency.

The Nicolás Maduro run government is trying to skirt the economic sanctions imposed on the Venezuelan economy through the announcement of its own oil-backed “petro” cryptocurrency.