March 4, 2024



While blockchain and cryptocurrencies may cross national borders, regulatory frameworks vary from country to country, and what is permitted in one jurisdiction may be prohibited in another.

Dusk Network is dedicated to enabling secure, compliant and scalable decentralized finance and facilitating the tokenization of securities and other financial instruments. Our focus is primarily on Europe due to its importance to our target audience and the impact of upcoming MiCA regulations on the blockchain industry in the region, but we are actively monitoring and keeping abreast of evolving global blockchain regulations . Business Development Executive Ryan King covers MiCA in detail in this 5-part series (Click here to view part one) if you want to dig into what’s going on in the EU.

While the U.S. typically dominates the news, different countries have different needs and circumstances and therefore approach cryptocurrencies and blockchain in different ways, with some taking steps to adopt the technology, others creating a business-friendly environment through taxes, and others then become the holders themselves.

In this article, we explore the various approaches countries are taking to regulate and engage with blockchain technology, highlighting some of the key challenges and opportunities this presents to the global community.

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Quite possibly the most openly pro-cryptocurrency country, El Salvador has shown a strong openness to Bitcoin. President Nayib Bukele even tweets regularly, even with Crypto Twitter Culture.

El Salvador took a groundbreaking move to recognize BTC as legal tender in September 2021, becoming the first country to do so. This means that Bitcoin can be used to pay for goods and services and to settle debts.according to this report According to PwC, the three main reasons for this are to improve the efficiency of remittances, reduce the number of unbanked people and reduce dependence on the US dollar.

When examining the impact of cryptocurrencies, it is important to consider the unique motivations and needs of countries outside the West. People around the world rely on remittances, but sending money back home can be slow, expensive and time-consuming.this Global Remittance $796 billion by 2022, more than the GDP of Turkey, Saudi Arabia and Switzerland, and if “global remittances” were a country, it would have the 17th largest GDP after Indonesia.

Australia

Australia has taken a proactive approach to cryptocurrencies and blockchain technology, with regulatory frameworks and innovations in both the public and private sectors, and heavily regulated institutions such as banks have been taking risks with stablecoin experiments.

In Australia, cryptocurrencies are treated like property, which means they are subject to capital gains tax and can be used for trading while being legally traded, stored, and even included in training for KYC and CTF procedures. Unlike El Salvador, which classifies $BTC as a legal tender, Australia considers cryptocurrencies an investment.

In a major development, the National Australia Bank has partnered with renowned cryptocurrency firm Fireblocks to launch AUDN, a stablecoin on the Ethereum and Algorand networks, which is Most recently used for cross-border transactions.

Australia appears to be taking significant steps not to over-regulate the industry, even creating an environment where national banks feel comfortable participating.

Portugal

Portugal is known for its crypto-friendly tax laws, which promote the growth of fintech companies and investment in the country. As part of the European Union, Portugal is not only protected by MiCA regulations, but has been adopting blockchain technology, use blockchain In the public service, healthcare and supply chain industries.The government is trying to form a Blockchain strategyrecognizing the value and potential of the technology.

India

India, the most populous country in the world, has been cautious when it comes to cryptocurrency regulation, with the government watching international developments before laying out a clear framework.finance minister Announce “By definition, cryptoassets are borderless and require international cooperation to prevent regulatory arbitrage. Therefore, any legislation on this topic will only be effective if there is significant international cooperation in assessing the risks and benefits and evolution of common taxonomies and standards”

As it stands, India has no specific rules regarding cryptocurrencies and the space is currently unregulated (although crypto profits are taxed at 30%). India recently overtook China to become the most populous country in the world, and has already accepted electronic payments for goods, so it may only be a matter of time before India starts to regulate and enter the cryptocurrency and blockchain space.

China

While bitcoin is classified as a virtual commodity in China, its use as legal tender is prohibited and there are restrictions on cryptocurrency-related activities.

China has had an interesting journey with cryptocurrencies and blockchain, and was initially very enthusiastic. However, the initial coin offering (ICO) frenzy led to a blanket ban and China-founded Binance was forced to withdraw.

Although Bitcoin is classified as virtual merchandise In China, it is banned as legal tender and there are restrictions on cryptocurrency-related activities. 2021 China”ban bitcoin” and ban mining, although it’s worth noting that China has banned bitcoin since 2013. Currently, the purchase of bitcoin is banned, but holding cryptocurrencies is not.

However….

Hong Kong seems to be open cryptocurrency And work on crypto-friendly regulation so we can see Hong Kong emerge as a thriving crypto hub and potentially benefit from talent from China.

United Arab Emirates

The UAE, and especially Dubai, is becoming a hub for business, innovation, and cryptocurrency activity, attracting influencers and traders from all over the world (those low/no tax rates work!).

With regard to blockchain and cryptocurrency regulation, the UAE’s approach appears to be focused on facilitating the trading and ownership of digital assets, as well as fostering innovation in the blockchain space. Institutions in the UAE (and in cooperation with Saudi Arabia) are embracing cryptocurrencies, many new departments are being set up, and existing departments include cryptocurrencies within their remit.

Other Notable Legislation

Indonesia earlier this year updated its laws Stay up-to-date on current developments and demonstrate a deeper understanding of technology and its potential beyond just trading.

Singapore has long been known for being crypto-friendly (and business-friendly too) Authorities working with banks To clarify the development of cryptocurrencies.

Malta is another country known for being crypto-friendly and implementing it Three new laws Help regulate and develop blockchain technology; Malta Digital Innovation Authority Act, Technology Arrangements and Services Act, and Virtual Financial Assets Act. These may see Malta really take the lead, but as a member of the European Union, Malta will also be bound by the MiCA regulations.

What does it mean?

The different approaches to cryptocurrency and blockchain regulation that we analyze provide valuable insight into the future of mass adoption and institutional engagement in this fast-growing industry, and there’s a lot to be excited about. In many ways, mass adoption relies on institutional adoption, and institutions cannot get too involved in crypto until they have a clear regulatory framework.

Around the world, we are seeing different approaches to this new technology and the opportunities it brings, with some countries making it easier to do business and trade, and others looking to develop the underlying technology outside of trade.

There is also a difference between countries that are “crypto-friendly” because they haven’t yet enacted clear regulations, and countries that are actively crypto-friendly and have regulations in place.

Notably, countries like India seem to be holding back. A country like India might be ready for mass blockchain adoption (great engineers, tech hub in Bangalore, lots of QR code payment apps for digital payments, and lots of unbanked/banking services limited access), but it seems to be looking back at what other countries have done and how it turned out.

It will be interesting to watch how the global landscape for cryptocurrencies and blockchain technology evolves as the MiCA comes into force and other countries develop their own regulations, with some countries likely to benefit from international stablecoin transactions and near-instant settlements, while others may will fall behind.

It is certainly an exciting time for blockchain and cryptocurrencies, and we are delighted that the EU has a clear plan and are delighted to be part of the process of making blockchain usable.

Disclaimer: This article is for informational purposes only. It does not provide or be intended to be used as legal, tax, investment, financial or other advice.