Cryptocurrency recognition and regulation around the world

The emergence of cryptocurrency in the trading environment has become popular among investors. The cryptocurrency trading is now strengthening its ground every day with more and more people getting attracted towards it.

This Article will help you to understand the legal environment of cryptocurrencies and how safe it is to invest in digital currencies considering the legal and regulatory environment.

Cryptocurrency as a legal tender

The cryptocurrencies does not act as a legal tender and it also could not be used for fundraising. As stocks are backed by companies, and stock price could be determined through company’s financial analysis and other stock stability indicators, cryptocurrencies speculation is determined by its demand and supply in the market.

There is no government or organization which regulates cryptocurrencies. So different countries have different approaches towards regulating cryptocurrencies.

A glance towards the regulation of cryptocurrencies in economically strong countries.

Japan:

Japan was among the first countries who recognized bitcoin as a legitimate cryptocurrency for payments. The exchange of cryptocurrency was managed by the cryptocurrency licensing program, which enabled the people of Japan to use and trade bitcoin legally.

Few countries in Europe have made the use of digital currency legal and there are few countries who are looking forward to legalizing it.

Germany:

Germany has made use of bitcoin official and banks now would be able to store, sell and receive cryptocurrencies. Cryptographic currencies do not act as a legal tender, meaning that crypto currencies like bitcoin and ethereum are treated as intangible assets in regards to income tax legislation.

France:

France is at its early stages of development in legalizing cryptocurrency. So far, there has not been enough progress in regulating cryptocurrencies, however people can buy cryptocurrencies like bitcoin or convert it into Euro.

United States:

Cryptocurrencies are legal in the US, and in most of the states it is allowed by the government to buy, sell and make payments if the seller of the goods is willing to accept cryptocurrencies as means of payment.

However, the IRS has also acknowledged the negative impact of using a cryptocurrency, and regulations are in process to catch up the loophole and make the flow and transaction of bitcoin transparent.

China:

The Chinese government has made a harsh stance towards legalizing and recognizing cryptocurrencies, as China does not recognize digital currencies as a legal tender.

The Central bank of China made it clear that cryptocurrencies would only be welcomed with the elimination of all scams and risk involved in it, which was nearly impossible in near future, hence china does not recognize cryptocurrency as a legal mode of payment.

It is prohibited to buy and sell cryptocurrencies and some trading platforms have been banned and the only way to acquire cryptocurrencies is through peer-to-peer. However, China is looking forward to launching its own digital currency.

Does legality matters when it comes to cryptocurrency.

The matter of legality varies from country to country. It is all about, to what extent does a country allow cryptocurrencies to regulate, more flexible the government policy towards recognizing and legalizing digital currencies, more safer it is for the people of a country to trade and trust cryptocurrencies.

So it is very important to consider the government policies and legal matters regarding cryptocurrency before getting involved in digital currency trading.

On the other side if one wants to know the profitability element in cryptocurrencies, there are AI crypto trading systems like you can join Bitcoin Formula which makes sures that investors’ money does not get wasted.