Everything You Need to Know About the Global Reception of Cryptocurrency
The cryptocurrency hit the market like a stone in a pond back in 2009, creating a ripple effect that is still being felt today. Whether that is because of the new companies that have sprung up in the wake of Bitcoin or the new laws that were introduced to facilitate these new investment opportunities, cryptocurrency has changed much of the financial landscape.
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Almost every country reacted differently to this new phenomenon, and some regulations are still being debated as new opportunities arise. Some of these countries disagree on its status as a legitimate currency, others have embraced it wholeheartedly. There are even some countries that refuse to acknowledge it at all. So, how do different parts of the globe view cryptocurrency and its many varieties?
What is Cryptocurrency Used for?
First, let’s look at how cryptocurrency is used. Cryptocurrency can be bought by anyone using real money, and it can sometimes have a different value depending on the developer’s place on the stock market.
There are several reasons why people choose to invest in cryptocurrency. One of which is because it is viewed by many as the future of the economy. Some experts believe that traditional legal tender, like the US dollar, is going to go extinct and will be replaced by this digital form of currency. As such, these people are buying up as much stock as they can while it is cheap and not a necessity. They believe that the prices will skyrocket once cryptocurrency becomes the norm and want to be ahead of the curve as much as possible. As you will see in a bit, this isn’t likely to happen with some country’s attitude toward digital currency.
Another reason why people buy cryptocurrency is that it can function as a regular currency. You can use your cryptocurrency in certain places to buy goods or shares of a company. There are even crypto stores cropping up online that only accept cryptocurrency or non-fungible tokens. It is unclear how successful these businesses are, but the validity of these businesses will become apparent shortly.
The final reason you may opt to buy cryptocurrency is that you can use it as an investment opportunity. A cryptocurrencies’ worth is tied to the company that owns it and subsequently its place on the stock market. This means that its value can rise and fall rapidly, creating a race to get involved in the next most lucrative format. Some people buy the stuff and leave it to accrue value, while others seek to exchange their currency for another brand that they believe will receive a spike of good faith very soon. Using cryptocurrency in this manner is very much like playing the stock market only now everyone has the funds to get involved.
All of these uses have created a storm that has made cryptocurrency very relevant in modern times. It is only gaining more popularity as it continues to develop, which means that more people are becoming aware of the currency. It also means that new laws are needed to regulate the use of cryptocurrency.
However, not every international government views this currency the same. Let’s look at cryptocurrencies’ place in different foreign markets and why it used this way.
Cryptocurrency in Canada
It is quite common for people to assume that buying cryptocurrency in Canada is illegal. Actually, you can buy and trade as much cryptocurrency as you want on these shores.
Cryptocurrency is not as popular in Canada as it is in other global markets, but you can still receive all of the benefits of using it, and you can even invest in Canadian crypto wallets, like those found on Wealth Simple.
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What you cannot do; however, is use your cryptocurrency as a means to make financial transactions. The Canadian banks will only recognize their own dollars and coins as a form of legal tender, making any other type of monetary transaction illegal.
This does not rule out all of the benefits of cryptocurrency in the country. You can still invest in and exchange the currency, but you will be penalized for using it as an alternative currency.
Cryptocurrency In The USA
The USA is more lenient when it comes to the use of cryptocurrency among its population. You can, of course, invest in cryptocurrency in the United States, but their laws also allow for the purchase of goods and services with this type of currency.
However, buying things with cryptocurrency isn’t as easy as stepping into a store and paying with digital currency. The proprietor must agree to the type of currency before you pay and they are well within their rights to decline it. Most cryptocurrency transactions in the USA are performed online, specifically on websites that only trade in this form of currency.
Another benefit of using cryptocurrency as means of purchase is that it can be used to buy more expensive items in a reliable way. The blockchain in a cryptocurrency allows the government to track any purchases made, making it as legitimate as possible. Therefore, you are less likely to sell a new car or property to a person that is trying to launder money or commit tax fraud. This means that cryptocurrency is becoming a sound investment for retailers of pricey goods.
Cryptocurrency in Japan
The concept of cryptocurrency first originated in Japan and as such, they have a much more relaxed approach when it comes to the laws surrounding it.
Japan has all of the same regulations in place as the USA, only they have allowed their Financial Services Agency the responsibility of monitoring any and all transactions made by crypto providers. This act places cryptocurrency more in line with their own countries economic currency. However, with this government body overseeing the usage of cryptocurrency, the misuse of these products can result in harsher sentences.
Japan has always been at the forefront of cryptocurrency innovation, and its diligence has made acts such as money laundering and tax evasion almost impossible. If there is a new law or stipulation regarding cryptocurrency, the chances are that it originated in Japan.
Cryptocurrency in China
On the opposite side of the spectrum, the Chinese government has made all forms of cryptocurrency illegal in their country. This means that you cannot invest in, exchange, or make purchases with any form of cryptocurrency.
The outright ban on cryptocurrency wasn’t implemented immediately after bitcoin’s introduction in 2009. In fact, crypto was freely used in China for many years. However, the government decided to place restrictions on the use of cryptocurrency in 2013. The new laws stopped the banks from being able to handle cryptocurrency at all. Further restrictions were then placed in 2017. These laws were made in response to the increase in money laundering and gambling fraud that was a direct result of the introduction of cryptocurrency.
The newer regulations stated that cryptocurrency cannot be used to make purchases, similar to the rules set out by Canada. However, these crimes continued so much that the Chinese government placed an outright ban on everything related to the currency in 2021. This means that the law can punish anyone that even owns cryptocurrency, let alone anyone that exchanges it.
Cryptocurrency in Europe
The European Union is a collective body of representatives that decide upon laws that are relevant to most of the countries in Europe. This union does not oppose the use of cryptocurrency in countries across Europe, making these nations’ laws closer to that of the US.
The main difference in Europe comes from the fact that the EU does not recognize cryptocurrency as a form of universal currency. This means that while you can use this alternative payment method as an investment or as a line of credit, but each individual nation can set its own tax laws regarding the currency.
Some countries in Europe choose to view cryptocurrency as property, which means purchases and profits made with the currency will be taxed closer to 100%. Others choose to look at it as a personal asset, which means that it can be taxed anywhere between 0-50% for every purchase.
The EU is in a trickier position than most as it has to decide on how cryptocurrency works across most of its borders, even when some countries use a different currency altogether. However, this governing body has struck a balance between legalizing the currency and allowing each country to monitor and tax its usage as they see fit.
The idea of cryptocurrency is still a relatively new concept. These forms of currency are changing so rapidly it is no wonder that different countries cannot decide on how to approach the subject. As you can see from China’s response, the attitudes toward cryptocurrency can change very quickly. We aren’t likely to see a unified attitude toward this form of currency until its development slows down. It can either end up as a legitimate alternative to currency, or an outdated rumor of the past. Only time will tell.
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