While presenting the Union Budget, India's finance minister Arun Jaitley socked thousands of Indian investors by declaring cryptocurrencies as 'not a legal tender'. The announcement instantly led to a massive drop in the value of the global cryptocurrency markets, eventually causing a decline of over a billion dollar in market capitalization. Comparing the finance ministry's call on cryptocurrencies with other countries on how they approach the same issue, we find a more investor-secure approach adopted by major countries around the globe.
South Korea reverts its position on cryptocurrency ban
In early January, the Justice Minister of South Korea had made a public statement that a complete ban on cryptocurrency trade was being planned by the South Korean government. Weeks later, the nation’s finance minister, Kim Dong-yeon, has officially stated that there is no such plan. Rather, the government is planning on regulating the digital assets trade, and not shutting it down. The clarification is certainly a relief for the Korean investors, but contradiction between the two ministries had created big uncertainties for the investors. The South Korean finance ministry stated that it plans to control illegal use of cryptocurrencies after it detected more than 600 million USD of illegal trade activities recently.
US starts legal trading of Bitcoin derivatives
The stances taken by US regulatory bodies regarding cryptocurrencies have been mixed. The Securities and Exchange Commission (SEC) has warned traders of the risks and even stopped Initial Coin Offerings from going forward. The Commodity Futures Trading Commission (CFTC) in the US became the first financial regulator permitting cryptocurrency derivatives to be traded publicly. Secretary of the Treasury Steve Mnuchin suggested a possibility for minted fiat currency over cryptocurrency. During the World Economic Forum recently, Mnuchin said his prime focus was to make sure digital currencies are not used for illicit activities.
Canada takes a friendly approach
Canada has been more accepting of the cryptocurrencies. In 2014, it became the first country to pass a national law on digital currencies. The Canadian Securities Administrators (CSA) issued a regulatory notice in August 2017, stating “the potential applicability of Canadian securities laws to cryptocurrencies and related trading and marketplace operations and to provide market participants with guidance on analyzing these requirements.” The country has also partnered with the Ethereum Foundation to promote smart contracts in their economy.
Russia recognizes cryptocurrencies as digital assets
Authorities in Russia have legally accepted cryptocurrencies as digital assets with the Digital Assets Regulation Bill. The bill sets the regulatory framework for cryptocurrencies in the former Soviet Union. The Russian government notes that due to the potential for cryptocurrencies’ fiscal transparency, it is keen on adopting cryptocurrency trading, with regulations reducing the risk of fraud and increasing government’s tax revenue.
Japan- the first country to fully legalize cryptocurrencies
In stark contradiction to China, Japan became the first country to fully legalize the ownership and exchange of digital assets and currencies. Going through deflationary pressures for many years, the Japanese economy is quickly embracing cryptocurrencies and the underlying technology. But, the recent hack involving theft of over 530 million of NEM coins gave a huge setback, only to be looked closely by the Financial Services Agency (FSA) of Japan.
Belarus joins Japan
Belarus also added itself to the list of countries which look at the future through the crypto lens. On December 21, 2017, the country's President Alexander Lukashenko signed official decree 'On the Development of the Digital Economy', which aims to digitize its economy through blockchain technology and legalizing trade and mining of cryptocurrencies. Similarly, other European countries like Estonia and Luxembourg have maintained support to digital currencies.
Singapore's Deputy PM also gives support
Singapore’s Deputy Prime Minister Tharman Shanmugaratnam, in a recent comment, expressed his support for cryptocurrencies, saying his country does not make a distinction between transactions using fiat or cryptocurrency. He stated that cryptocurrencies are a 'novel way' of transmitting value.