How the governments of the world View Cryptocurrency from around the world: a battle of identity

  How to classify government cryptocurrencies from around the world

For the individual, in a broad sense, the term cryptocurrency is profoundly foreign, and honestly it is not a surprise. Even for the average holder of a necessary amount of encryption, what is actually does not come out as much as what it is used for.

The same is not true for the governments of the world, the governments that struggle with what is from a legal point of view and how it fits into their ever-changing landscape. Is it a currency? Good? Commodity? Safety? Or something else entirely?

One thing is certain is that neither of the two governments has the same definition if it exists. The lack of any cohesive definition means that crypts like Bitcoin and Ethereum are left in the metaphorical medium, as fluctuating entities with disproportionate values ​​compared to the number of legal definitions they have.

The cryptocurrencies, at the moment, lack a single clear definition with countries that treat them as a resource as seen in Mexico and Denmark, and in other countries such as Japan and Germany, treating them as a form of currency , the first with employees who have been paid prospectively.

So what is the real answer to this question? What, exactly, am I? The answer could, in fact, be all of the above, which is not surprising the enthusiastic owner of the crypt, but very bad for the concert of governments around the world.

But just as in the eyes of the law, each case must be treated in a very unique way: on the evidence presented to the government. And here are the ways in which certain governments govern the function of the blockchain.

If the governments of the world fail to reach a coherent consensus on what the Cryptos are, even governments on a singular basis have as many problems. It is here that the United States truly embodies the problems that governments have in defining crypts.

To put it in perspective, five separate agencies have different classifications and competing for what the Cryptocurrencies are.

The Securities and Exchange Commission (SEC) –

Since June, the SEC has defined cryptocurrencies as a form of security, which means that people buy these cryptos with the intention of generating a return. For example, in March, he issued a public statement, mentioning that any crypts that are traded on an asset would fall under the SEC regulations as security.

"A number of these platforms provide a mechanism to negotiate resources that meet the definition of" security "under federal securities laws.if a platform offers the trading of digital assets that are securities and operates as one "exchange", as defined by federal securities laws, the platform must register with the SEC as a national stock exchange or be exempted from registration. "

In the wake of this SEC announcement, the underlying value of Bitcoin declined by approximately 10%, but while this is the prescription of the SEC on the definition, other agencies in the United States have not signed the same. At the same time, in March, a federal judge in New York ruled that the Commodities and Futures Trading Commission (CFTC) can regulate BTC and other currencies as commodities, putting them at the same level of gold, oil and coffee.

If this did not prove to be problematic enough, even the Inland Revenue Service (IRS) had come forward with the fact that cryptocurrencies had to be under their responsibility as a taxable form of property. Issue of this declaration in the same month.

"For federal tax purposes, virtual currency is considered property."

And while these three force the conversation on who is right, another definition has been anticipated by two other agencies. The US Office of Foreign Assets Control (OFAC), the US Treasury Department which is responsible for applying the country's sanctions against other nations.

In April, OFAC announced that it will treat any kind of digital currency like Bitcoin in the same way as traditional Fiat currencies. This fact has made official anyone dealing with "sanctioned" money such as the Venezuelan Petro, the state-owned cryptocurrency of the country, an illegal act.

Together with OFAC, the Financial Enforcement Network (FinCEN) is the organization responsible for countering illegal activities related to money such as money laundering and terrorist financing. Unlike the other federal departments, FinCEN was the first to make a decision on cryptocurrencies.

In March 2013, FinCen updated its regulations to cover all "persons who create, obtain, distribute, exchange, accept or transmit currencies", this required exchange of currencies to adopt regulatory changes to counteract recycling and illegal financing activities. These include "Know Your Customer" (KYC) and anti-money laundering (AML) policies.

Overall, this means that the United States does not have one, two or three but four definitions for cryptocurrencies, but they are not mutually exclusive.The pressing problem is that having so many definitions is that it pushes all the pain away. logistic to mark it as a taxable income for companies and individuals.

Although it seems the epitome of the incompetence and contradiction of the government, there are signs that these agencies are starting to merge around a definition unified for criptos.

In June, for example, the SEC announced that its decision that the Cryptos are titles, do not apply effectively to Bitcoin and Ethereum, both having the two largest market capitalization on the market, it has been announced that it will use this definition for Initial Coin Offerings (ICOs), dedicating its focus to them.

A month earlier, the CFTC Commissioner, Rost in Behnam, he gave a speech on the need for deeper collaboration with the SEC.

"I talked about my position in the CFTC and the SEC's efforts to harmonize the rules Given a large number of market participants registered at maturity and overlapping policy, there is a real opportunity for CFTC and SEC to harmonize redundant rules and leave market participants and regulators in a stronger position. "

While these initial steps are modest in nature, but considering that the SEC now no longer considers Ethereum and Bitcoin as titles, at the very least, narrow down the list of what Criptovalute might be in the United States. Even with this modest progress, they are not yet considered as something very close to legal tender currency, but with recent news from NYSE, Starbucks and Microsoft, this could be a coming definition.

In the meantime, despite not being recognized as legal tender, it has not prevented a large number of companies from accepting Bitcoin between its card and fiat payments.

Canada –

Very similar to the United States, Canada does not recognize cryptocurrencies as a legal tender currency, unlike the United States, however, is that it is much more unified in terms of what in reality are Cryptos. According to the country's revenue service, the cryptocurrencies of the Canadian Inland Revenue (CRA) are currently defined as commodities.

For this reason, cryptocurrencies negotiated within Canada are treated as if they were trading transactions with the appropriate tax level applied to each. With this in mind, the Canadian Parliament, in 2014, defined cryptocurrencies as a form of "monetary services business" for the updating of its anti-money laundering policies.

In addition, the Canadian Securities Administrators (CSA) stated in August 2017 that "many" Ico "imply the sale of securities."

Mexico –

The Mexican government has also announced that the cryptocurrencies would be defined as a commodity. On March 1, 2018, the government announced the passage of the law to regulate financial technology companies. This legislation contains a segment on the topic "Virtual Activities", or "Criptovalute".

In contrast to the various other definitions used by governments such as stocks, commodities, property and money, the definition of "virtual assets" is generally vague, and government policy has done nothing to narrow down this definition. In fact, it was announced that Mexico will introduce secondary policies that threaten to tarnish the waters even further.

According to the rumors of various politicians within the government, the chances are that the cryptocurrencies will become circularly defined as a form of commodity. The important institutions that reinforce this conviction include the Banco de Mexico, with its governor, Agustín Carstens, stating that, since Bitcoin is not regulated by any central bank, it would be considered as a commodity rather than a currency.

South America –

In this region of the world, the definition of what a cryptocurrency becomes even more blurred. Venezuela, for example, launched its state-supported cryptocurrency in December 2017, with the government decreeing that cryptocurrency must become a form of legal offer in all financial institutions, including all government agencies.

While all other cryptocurrencies have been rapidly defined as financial assets and securities of government and financial institutions as a result of Petro, none of them has been declared a form of legal tender currency.

And while the Petro was forced to pass, the government at all levels and especially by Nicholas Maduro opponents, railed against Petro. In March 2018, the Venezuelan government declared that the Petro is considered illegal due to the fact that it was created without any congressional approval.

While cryptocurrencies in countries such as those above have enjoyed a distinction or another, they have been relatively non-existent in South American countries such as Brazil. The country's Securities and Exchange Commission (CVM) stated that cryptocurrencies can not be legally recognized as a form of financial activity in January 2018.

Notwithstanding the fact that the Brazilian Inland Revenue has mentioned in Previously, in 2017, that they "be considered a financial asset for the purpose of tax revenue.

In Chile, it is not yet defined as a security or security in any capacity." However, the Central Bank has recently begun to reflect on what regulations to adopt regarding cryptocurrency

Meanwhile, in Colombia, the Superintendent has recently declared that digital currencies do not count as money or securities, but must be considered a "high risk investment" that acceptable to a country of Ecuador, which not only did not provide any distinction of what is a cryptocurrency, but also claimed that The use of cryptocurrency for payment is firmly prohibited.

There are some countries in South America that have not only proven to be receptive to the use of cryptocurrencies but far more open than their neighbors. Argentina is an example of this mentality, while they do not have legal tender status within the country, they are treated as a form of "goods" under the Argentine civil code, which works alongside the December update, which ranks Cryptos as a form of income derived from shares and securities.

What each of these separate definitions shows is that wherever cryptocurrency is involved, the socio-political climate of the nations that deliberate it is a significant factor. Cryptocurrencies are highly adaptable in the way they work for users, so their definition is largely shaped by the political and economic conditions of the country in which people use them.

What does this mean? Wherever there is a fragile economy, or the national currency is weaker than the stronger neighbors, cryptocurrencies tend to be subject to more stringent regulations.

This economic and political fragility is easily evident when compared to the definitions given by the cryptocurrency of European nations. In Germany, the largest European economy, cryptocurrencies like Bitcoin are considered in the eyes of the law as "private money" in April 2014.

Prior to this decision, the German Finance Ministry had previously recognized the Cryptocurrencies as "Unit of account "" in 2013. This means that it would be considered as a financial instrument subject to taxation, which requires the companies that exchange it to register with the Federal Supervisory Authority.

Starting this February, the Reichstag , the German government agency, the officially declared cryptocurrencies have the properties of real money, which means that, according to the legislation of the European Union, the use of cryptocurrency as a means of payment when used in this way is exempt from taxes.

The United Kingdom still has to give a clear definition to cryptocurrencies, leaving them relatively uninterrupted. the continental neighbors or international peers, the United Kingdom was one of the few countries to avoid providing cryptocurrencies with a definition that compares them to others, much older elements, since the fact of doing so would be imprecise.

In 2014,

"Cryptocurrencies have a unique identity and can not therefore be directly compared to any other form of investment activity or payment mechanism."

This announcement would explain why no steps were taken to define cryptocurrencies, unlike its G20 partners. Even if the UK were to follow its partners in labeling Cryptos as equity with respect to currencies, according to the March document, and even if the cryptic investment is subject to capital gains tax in the UK – making it an investment.

Following the example of the style of the United Kingdom, France has also moved away from giving an old-fashioned definition to cryptocurrencies. It has made strong efforts to cohesion with Germany to propose cryptocurrency laws that can be translated internationally.

The French government seems to be heading towards a series of very favorable regulations, the Banque de La Francia, since 2013 has considered the cryptocurrency neither as a currency nor as a means of payment, on the contrary, at the end of the 2017 consultation, the 39; AMF noted that cryptos are considered two categories: utility tokens and security tokens. At the same time, both private and commercial cryptocurrency traders are subject to taxation, with the French government defining Bitcoin as a "unit of account" to collect tax.

Throughout the European Union, the outlook becomes more and more different comes to the definitions of Cryptocurrency. But one of the most unifying perspectives is that cryptocurrency should not be considered as a form of currency unless, of course, the country in question does not want to align it with existing AML legislation.

Sweden, for example, the central office of its own country, the bank announced in March that Bitcoin should not be considered as real money, which contradicts the previous announcement that Bitcoin is not subject to any sales tax when negotiated , according to the Swedish Tax Board.

In Denmark, a declaration was handed over by the Financial Supervisory Authority in 2013, which reiterated that Bitcoin and other cryptocurrencies should not be considered as currencies. In March 2014, the central bank of the country issued a statement stating that the criptoson are not currency.

Although not a currency, what is established by the Danish Tax Authority, which in 2018 announced that trading with Crypto profits was a taxable income which, through deduction, would make them fall within the definition of activity speculative.

The Netherlands and its central bank also refuse to consider criptos as Bitcoin as a currency, writing on a January position document.

"We do not consider the criptos as money."

In contrast to the central bank, a court in the Netherlands officially declared that Bitcoin can be considered a "transferable value", making ” title=”The-Battle-of-Identities-How-Governments-of-the-World-Define-Cryptocurrencies”/>

This position is very similar to that of the Italian government which, through its Ministry of Economics and Finance and within a draft decree, described cryptocurrencies as a form of,

"Digital representation of value, used as an exchange tool for # 39; purchase of goods or services. "

Unlike its Dutch cousins, the Italian definition does not categorically divide the crypt solidly as currency or property.

In Latvia, both its State Revenue Agency and the Bank of Latvia have pledged to guarantee to citizens that cryptocurrencies are a means of contractual payment, a definition not inclined to a complete definition as currency .

In Europe, but not within the EU, Switzerland is an exception to the broader inconsistency in the definition of cryptocurrency. Contrary to countries that have adopted an aggressive approach to cryptos, Switzerland has taken an aggressive approach to cryptocurrencies.

Interestingly, it has taken this position since Bitcoin and Ethereum have opened important offices in the country. In 2014, your federal government produced a report stating that cryptocurrencies had to be defined as assets rather than as currency or commodity.

From this announcement, the government presented a series of simplifications "in order to get a better position as a friendly Fintech nation, and it is clear that this will also be the case for cryptocurrencies. this includes the Region of Zug, which in 2017 began to accept the Bitcoin and Ethereum cryptocurrencies as means of payment for administrative and municipal costs.This shows that, at least at the regional level, those government bodies are willing to accept it as a form of currency

Other regions like Chiasso have also begun to accept cryptocurrencies as payment for things like taxes.

In summary, Europe demonstrates two specific characteristics with respect to the United States, Mexico, Canada and South America. The first is that some of the major countries, in an attempt to make a broad definition of cryptocurrency, are giving cryptos the space and time to enter an area more than and defined by which position, regulation can be easier to find for them. 19659003] In the second, other countries are trying to re-apply the existing definitions that, in their opinion, would prevent any illegal activity involving cryptocurrencies. While for the average citizen, this legislation seems to be carved when, in reality, they are only stop-gap measures to prevent systematic abuses in the use of the crypt.

It is also important to understand that while nations are moving towards more goals and have made legislation on cryptocurrencies, it is more likely that these policies will be truly geared towards the largest criptos on the market, such as Ethereum and Bitcoin. The exceptions to this seem to be Germany and Switzerland. Meanwhile, other nations are jealously defending their financial positions in the face of disruptive cryptocurrencies.

In China, the opposition to cryptocurrencies has been resolute and has developed only over time. In December 2013, the Chinese government issued a firm warning against Bitcoin.

"In terms of nature, Bitcoin is a specific virtual product that does not have the legal status equivalent to the currency and can not and should not be used as currency in the market.

The same noted also admitted that [19659012] "[Bitcoin] transactions act as a way of buying and selling goods on the Internet"

and while the note was clear on Bitcoin's position, he made no physical attempt to prohibit people from using cryptocurrencies.

The Chinese government of 2013 was one of the words and little action in the area of ​​cryptocurrency, the government since 2017, however, has only stiffened to the point of enforcing.From then, its government has banned the exchange of cryptocurrency coins at the end 2017, stating that they represent a "financial risk." Since then it has denied to the cryptocurrencies any legal definition as a security, a commodity or an asset.

Its own rules have also stiffened against mining and extraction of Bitcoins in China, restricting the legislation to prevent miners from operating in the country. Its policies against coin trading have since then caused an exodus of its native companies such as Binance and Huobi in Malta, the United Kingdom and the United States.

The landscape of Asia, in the context of the definition of cryptocurrencies, is one of night and day compared to China. Japan, for example, saw its government follow the completely opposite approach to encryption with China.

His government had initially defined Bitcoin as "not a currency" in 2014, but has since been reversed, when in March 2016, it approved the Payment Services Act, which has finally recognized Cryptos as a form of currency .

Although it seems a clear distinction, the language used in the act is much more similar to a definition of "property value" that can be used in a transaction for goods and services than a currency.

In South Korea, cryptocurrencies are officially defined as a "resource with measurable value", which was the verdict reached in the country's supreme court on March 30th. This definition is consistent with the guidelines and regulations established so far by the South Korean government.

This position includes an update in June that will include AML laws that require exchanges of coins to implement Customer Due Diligence and Enhanced CDD (EDD). measures, which offset the South Korean government's commitment in February to bring cryptocurrencies under the definition of assets.

In Singapore, his government turns to the side defining them as assets with respect to a monetary system. In August 2017, the Monetary Authority of Singapore (MAS) reported to Gettoni coins and initial offers of coins (ICO) that has jurisdiction over tokens that fall within the definition of Securities, a warning that was repeated again in September and May 2018 for eight grants.

This is the same position taken by the Hong Kong government, its Securities and Futures Commission (SFC), which announced in February that cryptocurrencies fall into the security category. This means in effect that exchanges of coins and ICOs must require the appropriate authorization to continue operating. Since he announced this, he has continued to close the ICOs for failing to comply with the licenses needed to operate, while he has also reminded people that cryptocurrencies are not a legal tender.

As many other continents have shown, the Asian continent and the numerous positions of its country regarding cryptocurrencies, coin exchanges and initial coin offerings show that they are a mixture of cautiously interested in the prospect that the cryptocurrencies belong

What is on show, however, is that while there is optimism, more countries in this region of the world are dragging their heels due to a mixture of concern, with only a few willing to Recognizing Bitcoin or other cryptocurrencies in any meaningful way This level of reluctance in both authoritarian nations and otherwise is also demonstrable in countries such as Russia and Turkey. Russia, for example, cryptocurrencies are considered "not a legal payment method" but as a property.

Turkey has not yet given cryptocurrency to any form of definition. Instead, it refuses to recognize it as a currency and is not compatible with Islam.

Because most of the world's governments are not sure what the future holds for the development of Bitcoin and cryptocurrencies in general, with some countries unable to grasp the radical implications that also involve encrypted ones. To protect their bets, some governments have avoided giving tailor-made legislation and instead have tried to implement the existing legislation as a definition of cryptocurrency as an attempt to reduce any cryptocurrency abuse.

This is a way to describe why cryptocurrencies have been overwhelmed by a series of various and often invalid legal categories.

Another perspective to take is that the variable definitions given to cryptocurrencies show, not so much the uncertainty or fear that governments have towards Crypto, but more about how truly versatile cryptocurrencies are found. in the borders of the countries where they are used by the public.

Users have, in various capacities and countries, the holders of cryptocurrencies like Bitcoin as a means of payment, while others treat them as a speculative financial instrument, or use it as a form of ownership. What the future holds for cryptocurrencies can mean more definitions due to users who apply them on an ever more diverse range of ways.

This adaptability to how users apply them to their situations is one of the characteristics that distinguishes cryptocurrencies from any other financial classification means. This is one of the reasons why countries such as the UK and their government have taken the appropriate steps to move away from attacking an archaic definition to something that visibly sees it as evolving, defining it instead as having "a & # 39; unique identity "[19659003] The last lesson that governments might need to keep in mind and take into consideration is that cryptocurrencies will only increase in the coming years, and in rapid evolution, when it comes to introducing a legal definition for them in the confines of their laws of the country, they will avoid to force it in the same category of the old financial systems, with which the cryptocurrencies do not share many or no attribute with the function

Source link