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The proposal to give legal status to cryptocurrency is now under discussion in America. A bill is being introduced there for that. On the other hand, many countries have banned crypto trading, holding or mining.
New Delhi. The proposal to give legal status to cryptocurrency is now under discussion in America. A bill is being introduced there for that. In those countries where crypto currency i.e. digital currency has been considered legal, governments are accepting it as investment or payment or are making rules for it. In America, cryptocurrency has been taxed as an asset and steps are being taken to control it. The European Union has also created a regulatory framework called Markets in Crypto-assets (MiCA) which legally deals with crypto assets. On the other hand, some countries have completely moved away from this trend and have imposed a complete ban on crypto currency.
In which countries is crypto banned and why?
Crypto currency has been declared completely illegal in some countries. For example, China has banned crypto exchange, trading and mining. Similarly, countries like Egypt, Algeria, Bangladesh and Nepal have considered crypto assets completely illegal. The root causes of these sanctions are: money-laundering, fraud, financial instability and lack of control. These countries fear that uncontrolled crypto currency may challenge their monetary policy or financial system.
What does its legality mean for investors?
Getting legal status for crypto currency means easy access for investors on a large scale, security under rules and regulations and transparency of operations. After the bill is passed in a country like America, platforms can get facilities like licensing, tracking and taxation. Where there are bans, investors turn to informal markets or peer-to-peer transactions, which increases the risk. For example, informal transactions continue in China despite a complete ban. Thus, the distinction between legality or illegality plays an important role in security, transparency and risk-management for the investor.
Global perspective and future outlook
Cryptocurrency has legal status in about 45 countries of the world, about 20 have some restrictions and about 10 countries have completely banned it. A growing trend is that governments are now not just choosing ban or openness, but are also creating regulatory frameworks so that crypto can be kept under control. Such bills are under discussion in America, which may impact other countries also. Investors-community are becoming aware in this direction that it is not enough to just invest, but it is very important to take care of the legality, security and rules of that investment.
