Bitcoin and Cryptocurrency Legislation – Asia and The Rest of World

 
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Deciding which legal jurisdiction applies to the national and international traders/investors of Bitcoin and other cryptocurrencies have plagued governments since the boom of 2017.

Continuing from yesterday’s ‘EU Bitcoin and Cryptocurrency Legislation – A Snapshot’, today’s article examines the laws, approaches and general legislative interpretations for Asia and the rest of the world. Despite not wanting to potentially miss out on lucrative cryptocurrency tax windfalls, governments across the globe have adopted different approaches with how to handle, and importantly tax, the use of digital currencies.

Turkey – Authorities have issued guidance declaring that Bitcoin (and digital currencies) do not meet the standards of electronic money and that the volatility leaves users with a high level of risk. Taxation likely to be treated as fiat.

Thailand – Despite initially declaring Bitcoin illegal in 2013, Thailand has recently issued state-sanctioned ‘digital exchanges’ and trading pairs for cryptocurrencies.

Singapore – In early 2014, Singapore’s government declared Bitcoin as a form of an asset which purpose was to purchase other goods and therefore was subject to a specific tax. The Monetary Authority of Singapore also required exchanges and ATM providers to de-anonymize their users. Bitcoin and digital currencies are not considered securities, however.

Philippines – The Central Bank of the Philippines has simultaneously issued a warning regarding virtual currencies whilst also stating that they are not subject to any regulation. Recent work with IBM for digital currency corridors suggests more going on ‘behind the scenes’.

Indonesia – Indonesia offers a rather confused position on digital assets, with the Deputy Governor of the central bank stating that the currencies have broken the national law, but offers no plans to regulate it.

Hong Kong – Currently produces more trading volume of Yuan/Bitcoin than China. Authorities are monitoring the developing ecosystem, wary of the potentially destabilizing effects from a mania bubble and crash.

South Korea – More mixed legislative signals. The South Korean Government has not officially recognized cryptocurrencies as legal tender, but are investigating ‘green-listing’ relevant business sectors in order to ensure compliance with KYC and money laundering laws.

Japan – Declared that Bitcoin should be treated as a commodity and subject to no specific laws in March 2014. June 2014 saw the Japanese Financial Services Agency stating that Bitcoin should be ‘self regulated’ and that industry should not be held back by red tape. Japan also pushed for a reversal on the commodity taxation applied to Bitcoin, choosing to impose taxes on specific forms of transactions. The Japanese Authority of Digital Assets has been formed to help regulate the development of the cryptocurrency industry.

Australia – The use, trading and mining of Bitcoin is considered legal and the Australian Taxation Office has announced its intention to incorporate guidelines on capital gains tax and VAT taxes.

New Zealand – Incredibly, the Governor of the Central Banks has stated that digital currencies have the potential to supplant fiat. A very positive digital asset outlook.

Bolivia – The Bolivian Government has banned the use of Bitcoin in the belief that it will allow tax evasion and monetary instability.

Conclusion

Global competition and the desire to capture untold tax revenues is clearly a pressing issue for governments around the world. A lack of uniformity and macro consistency will likely plague the space for some time yet. What is evidently clear, however, is that progress and development of crypto-assets will continue in spite of the legislation around it. Much like the blossoming of the internet, the space has reached a stage of ‘critical mass’, and as each day passes, it will become harder to put it back ‘in’ to pandora’s digital box.