Counting the top 5 countries with the strictest Bitcoin regulations

Bitcoin is no longer the exclusive property of geeks, and its popularity is increasing. However, as Bitcoin becomes more popular, governments of various countries have come up with various ways to regulate it. The following are the five countries with the strictest regulation of Bitcoin, but not all countries have explicitly banned the use of Bitcoin.

Iceland

Iceland is one of the few countries that has banned Bitcoin trading. The Icelandic central bank once said:

Iceland's foreign exchange trading law prohibits people from conducting foreign exchange transactions in the electronic currency Bitcoin.

However, Iceland has not stopped the development of its own cryptocurrency, auroracoin , which was created by Baldur Friggjar Óðinsson, a pseudonym that comes from Scandinavian mythology. In addition, Iceland is also a center for Bitcoin mining.

USA

The United States has always been very friendly to Bitcoin, but the US government always wants to control Bitcoin transactions by controlling legal currency. In March 2013, the US Internal Revenue Service (IRS) defined virtual currency as property and required taxation. At the same time, the IRS also pointed out that professional miners should pay self-employment taxes.

In September 2015, the U.S. Commodity Futures Trading Commission (CFTC) defined Bitcoin as a commodity that should be subject to existing laws. Therefore, the CFTC stated its position on Bitcoin and accused Bitcoin operator Coinflip of suspected illegal transactions (because Coinflip had not registered with the CFTC in advance). This incident is regarded as an important step in the legalization of Bitcoin, marking the integration of cryptocurrency with the existing legal framework. As for the license issue, the states still have not given a unified solution.

In June 2015, New York State issued the Virtual Currency Management Act. The act requires Bitcoin companies to comply with the regulations of the New York Department of Financial Services (DFS) and apply for a business license - BitLicense. BitLicense requires Bitcoin companies to strictly comply with Know Your Customer (KYC) and Anti-Money Laundering (AML) regulations. The application deadline is August 8. Any company that does not apply for BitLicense before the deadline or whose application is rejected cannot continue to operate in New York. The Bitcoin community believes that BitLicense seriously infringes on the free market of cryptocurrency. Many companies left New York immediately after the launch of BitLicense, including ShapeShift, Kraken, Bitfinex, LocalBitcoins, etc.

Japan

Since March 2016, Japan has defined virtual currencies as assets or property that can be used for payment. Since then, Japan has also introduced corresponding policies to combat money laundering and protect the rights of consumers in digital currency exchanges. These new regulatory methods bring Bitcoin exchanges under the jurisdiction of the Financial Services Agency (FSA) of Japan. Bitcoin exchanges must register with the FSA before going online, with a registered capital of no less than 10 million yen, and must submit annual financial reports and go through audit procedures. This move is mainly to prevent money laundering. In addition, "expelling" small businesses from this field is also conducive to protecting the safety of consumers' funds.

Japanese lawyer Motokazu Endo said:

Cryptocurrency prices fluctuate wildly and are a highly speculative industry. Many exchanges have weak financial foundations, and if they face bankruptcy, it will be difficult to guarantee the safety of consumers' assets.

At present, Japanese people need to pay an additional 8% consumption tax every time they buy Bitcoin through an exchange. Therefore, Bitcoin is also regarded as an "imported product" in Japan. However, people can also choose to buy Bitcoin in foreign exchanges and then "smuggle" it into their country to evade taxes.

Australia

The Australian Taxation Office (ATO) currently defines Bitcoin as an "intangible asset" rather than a currency, so Bitcoin transactions involve Goods and Services Tax (GST). If a Bitcoin company earns a sum of Bitcoin, it also needs to pay taxes. At the same time, in March 2016, the Australian government announced that it would introduce digital currency legislation and emphasized its double taxation problem, intending to exempt Bitcoin transactions from GST. Digital currency legislation will be gradually improved by the end of this year. In addition, Australian Bitcoin companies have been required to submit detailed customer information since 2014 and report suspicious transactions to law enforcement agencies.

Last August, the Senate Economics Committee (SERC) investigated Bitcoin and other cryptocurrencies and recommended that digital currencies be defined as ordinary currencies. In October, the Australian government report indicated that it would take a "gradual" regulatory approach to emerging payment systems, such as Bitcoin. However, Australian banks have always been hostile to the Bitcoin industry. Last September, several large banks, including Westpac and the Commonwealth Bank of Australia (CBA), issued warnings to the founders of at least 17 Bitcoin companies, threatening to close their bank accounts without further explanation. In order to understand whether the behavior of these banks complies with legal regulations, the Australian Competition and Consumer Commission (ACCC) has also launched an investigation into the incident.

In early August 2016, the Australian Transaction Reports and Analysis Centre (AUSTRAC), a government agency, released a report stating that “electronic, online and new payment methods” were frequently used in terrorist activities. The report ended with a recommendation for stricter regulation of cryptocurrencies.

China

The Chinese government's attitude towards Bitcoin is unclear. However, the legal status of Bitcoin is very different from that of legal tender: financial companies cannot directly hold Bitcoin. Officially, Bitcoin is not considered a payment method: banks do not accept Bitcoin, and the Chinese financial system will not protect the rights of Bitcoin users in the event of a crisis at an exchange. However, China does not prohibit the private use of Bitcoin. People can trade Bitcoin with each other and with foreigners. People can also use Bitcoin to purchase goods if a merchant accepts Bitcoin as a payment method.

In July 2016, the draft of the General Principles of the Civil Law of China defined Bitcoin as a "civil rights object" on the same basis as personal belongings, property, bank deposits and other private property objects. Therefore, holders can also receive legal protection when Bitcoin is stolen. However, the official has not yet confirmed the effectiveness of the bill.

Finally, let's mention a few countries that have completely banned Bitcoin, including Bolivia (South America), Ecuador (Latin America), and Bangladesh. However, Ecuador is planning to issue its own cryptocurrency, and the country's parliament confirmed its support for this plan in July 2014.