The cryptocurrency and blockchain space are highly turbulent not only in terms of valuation but also in the ways nations and regulatory agencies see these innovative technologies. Barring a few countries, most of the nations have adopted a rigid approach towards cryptocurrencies. More specifically, Asian countries see the digital coin as a threat to their sovereign structure and fiat currencies. While most of the countries differ in terms of the regulation adopted towards cryptocurrencies, we take a look at how some of the prominent economies and global superpowers treat cryptocurrencies in their own backyard.
The United States of America, the largest economy in the world with a GDP of around $20 trillion, has of late become a bit soft in its dealing with cryptocurrencies. Its federal agency, Security and Exchange Commission (), has come out with specific rules and regulations regarding the initial coin offerings (ICOs). Another federal department, Internal Revenue Service (IRS), has come up with specific guidelines regarding the earning related to digital coins. While most of the provisions and guidelines suggested by both these federal agencies are not very conducive for the growth of the Crypto space, still there is a positive feeling among crypto experts and investors that these regulations will help the digital coins to finally have some space in the mainstream financial system of the country.
The second-largest economy in the world, China, is completely against the idea of cryptocurrency even as it is working to come out with its own digital coin. As far as transactions with and cryptocurrency are concerned, all these are illegitimate in the world’s most populous country. Even worse, there is hardly any hope that in the near future, the Central bank of China will allow cryptocurrencies to operate in their country legally. From the mass adoption viewpoint of cryptocurrencies, this really doesn’t bode well. The same story goes for India, which is the sixth-largest economy in the world. The Indian Government and its Central Bank, the Reserve Bank of India, is very pessimistic towards the idea of cryptocurrencies. Given the fact that India is home to 1.37 billion people, the prospects of mass adoption of digital coins are again hit hard by the conservative stance adopted by the country’s government.
The United Kingdom, another important economy in the world, doesn’t have any specific regulations regarding cryptocurrency. The country is quite aware of the concept of digital coins, but its regulation doesn’t provide any specific criterion related to the evaluation of cryptocurrencies on various parameters. A similar stance has been adopted by France where cryptocurrency space has been largely unregulated, although specific provisions have been passed by the statutory body regarding blockchain Technology.
Cryptocurrency: Money or Asset
There is no unanimity when it comes to considering cryptocurrency as money or asset. There are some governments such as the likes of Germany and Japan, which consider cryptocurrency as money, but there are others like Denmark and Mexico which consider digital coin as assets. In fact, so wide is the divergence that regulatory bodies within nations are not being able to reach a consensus when it comes to considering cryptocurrency as money or financial asset. Take, for instance, the United States of America, where five different federal agencies have different opinions on cryptocurrency with all defining digital coins by their knowledge and understanding.
Current Cryptocurrency Climate
A look at the and you get the idea that the current climate of cryptocurrency is fraught with uncertainty and turbulence. Especially in the backdrop of ongoing coronavirus pandemic, we are witnessing a heightened level of suspicion in the market. Equity markets are in churn, and as a result, we are witnessing cryptocurrencies are now being consolidating in their valuations. However, this consolidation is not permanent as it keeps on changing daily.
The time has come when the world needs to visit a cryptocurrency concept from an altogether different perspective. The old viewpoint of witnessing cryptocurrency as a threat to the fiat currencies needs to be abolished, and in its place, a more open and conducive environment that will help cryptocurrencies to flourish in the long-term should be adopted. Government and regulatory agencies need to open up and embrace cryptocurrencies even as they continue to take their own safeguard measures to protect their own currencies.
Slowly and steadily, we are witnessing governments and central banks, embracing a less rigid approach towards the cryptocurrency domain. This has been partly mandated by the changing socio-economic conditions and the ongoing coronavirus pandemic is expected to play a positive role in the adoption of digital coins in the future. In sum, there is no harm to open up our economies for digital currencies, which can be used alongside fiat currencies to bring extra convenience to customers while providing high standards of safety and security during transactions.