Some 600 virtual currencies now exist around the world. Bitcoin has a market capitalization of more than $6.5 billion. Hopes are high for the currencies as both investment targets and low-cost methods of payment. Monetary authorities worldwide are setting out to regulate the technology, starting with measures to prevent money laundering and other illicit activity. Developments around bitcoin and the blockchain technology are ever evolving. While banks and technology companies are already involved in many such projects, governments are becoming increasing involved with the changes that have entered this new financial ecosystem.
Australia, Bitcoin & Blockchain
In a recent speech Greg Medcraft, Chairman, Australian Securities and Investments Commission (ASIC) spoke about the blockchain. He said, “This technology has the potential to fundamentally change our markets and our financial system …. Blockchain will have profound implications for how we regulate.” ASX has already collaborated with Digital Asset Holdings, LLC to develop solutions for the Australian equity market using the blockchain technology. Meanwhile in February, Melbourne based Bitcoin Group, a company that mines bitcoins, completed its initial public offering raising $4.2 million to be listed on Australian Stock Exchange (ASX). It was the first IPO by a company engaged in bitcoin mining.
In December 2013, the governor of the Reserve Bank of Australia indicated in an interview about bitcoin that “There would be nothing to stop people in this country deciding to transact in some other currency in a shop if they wanted to. There’s no law against that, so we do have competing currencies.
According to the communication on bitcoin issued by Federal Financial Supervisory Authority on 19 December 2013, bitcoins are legally binding financial instruments that fall into the category of units of account, in accordance with the first sentence of section 1(11) of the German Banking Act.:Germany
As of January 2015, a bill explicitly banning bitcoins does not exist in Russia, although it appears a de facto ban is in place. CNBC reported that bitcoin was illegal in Russia in December, 2014, and various Russian authorities and organizations have spoken out or taken actions against bitcoin. In early 2015, Russia’s media regulator blocked several bitcoin-related websites, in 2015 a Russian state-owned media outlet reported that “The [Russian] Central Bank… said that bitcoin usage was illegal under Russian federal law,” and in February 2014, the Russian Prosecutor General’s Office was quoted as saying, “Cyber currencies… including the most well-known, bitcoin, are money substitutes and cannot be used by individuals or legal entities.”
In December 2013, the Monetary Authority of Singapore reportedly stated that “[w]hether or not businesses accept bitcoins in exchange for their goods and services is a commercial decision in which MAS does not intervene.”:Singapore
The U.S. Treasury classified bitcoin as a convertible decentralized virtual currency in 2013 Now classed as a commodity (by the Commodity Futures Trading Commission, CFTC, as of September 2015.
New York has it’s own state laws under a document colloquially known as BitLicense. It has caused many problems for those optimistic about Bitcoin. Cryptocurrency is heavily regulated in this document by enforcing redundant money laundering laws. Many people filing taxes in New York consider using the TaxBit crypto tax software.
Cryptocurrency Laws Vary Around the World
The legal status of Bitcoin varies widely from country to country. Some allow it to exist with no issues, others have certain sanctions, while certain countries have outright banned it. This illustrates how different governing bodies have varying views on crypto currency. The Governments are constantly changing the laws as they see fit so these rules are subject to fluctuation. Being in a jurisdiction that has laws favorable to Bitcoin is a definite advantage if you’re someone trying to break out in some avenue involving cryptocurrencies.
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