What Is Blockchain?
It’s safe to say that blockchain was one of the most recent trendy topics. Blockchain was introduced in 2009 in order to explore its vast potential, only a few countries expanded the territories. However, after the begin of 2018, this rate experienced a tremendous rise. The regulatory actions were taken directly or indirectly by some of the countries ‘ representatives as an introduction to the blockchain market. It is expected that the broad application of this technology will affect the lives of citizens, health, finance, governance, industry, and other sectors.
That’s why different countries are embracing their enormous potential. To incorporate blockchain into their critical sectors, most governments don’t have a legislative basement. It could be a good option to address security issues, update countries ‘ voting systems, or maximize blocks of power and regulation. Nevertheless, there are countries that have already embraced blockchain and cryptocurrencies and are successfully developing their major industries and sectors. So let’s look at the top 5 countries currently considered legal blockchain and cryptocurrency.
Indeed, Japan is the first nation to implement the electronic cryptocurrency concept and to establish laws which govern operation with it. Japan has long been known as a high-tech country, so it’s no surprise it’s on the blockchain lists of countries. Bitcoins was recognized in Japan at the earliest stages of 2017 as a legal tender, which gave consumers the opportunity to spend them not only in a virtual but also in real life. In 2014 and 2015, the Financial Services Agency (FSA) published a report. It formed a cryptocurrency exchange business registration system.
It also established electronic cryptocurrency transactions that are subject to money laundering regulations and built a basement for the legislature to protect its users. Japan pays great attention to the protection of its users ‘ information and resources. A recent hacking attack in January 2018 on Coincheck resulted in enormous financial losses. The government made a decision to set up a Japan Digital Currency Exchange Association after this. It helps by inspecting actors on the virtual currency market to avoid future attacks.
The Financial Crimes Enforcement Network (FinCEN) of the U.S. Treasury Department has been dealing with Bitcoin guidance since 2013. On May 9, 2019, the last one was announced. Bitcoin has been defined by the Treasury as a convertible decentralized virtual currency, according to this guidance. It is authorized as a form of payment from service providers such as Shopify, OkCupid, and Overstock on several online marketplaces. In addition, there are all over the country shops and restaurants where you can pay with BTC. Bitcoin mining is also legal in the United States. When it comes to Bitcoin payments, they are subject to the same anti-money laundering regulations that apply to conventional currency transactions, however, scammers can use it because of the anonymity of Bitcoin to sell drugs and illegal goods, called the Dark Web.
Canada has become a technical center for blockchain creation as the homeland of the Ethereum blockchain founder, Vitalik Buterin. Research has been presented by the Bank of Canada, Payments Canada, and R3 a distributed database technology firm. It covers the possibilities of transforming the wholesale payment system through decentralized technology. The country is already in the method of introducing some of the findings into its own financial system.
The taxation of cryptocurrency activities in Canada is also provided at the legislative level. Payment of goods or services in Canada can be made electronically, but even as a consequence of a barter exchange, a tax fee is imposed. When people want the cryptocurrency to be introduced, they charge an income tax and capital gains tax. Cryptocurrency can also be used to pay for labor in Canada. For Canadians, this is a common practice and is also subject to taxation. The tax is levied on the basis of labor law.
The regulation of blockchain and cryptocurrency in Switzerland began in 2014. A report was released by the Swiss Federal Council identifying cryptocurrencies as a property that can be traded on the Internet. Moreover, Switzerland recognizes quite a huge range of benefits that blockchain and virtual currencies can offer. After recognizing that there is a lack of legislative basement to deal with cryptocurrencies, the government tries to create favorable business conditions. Tax systems have been launched in Switzerland, according to which cryptocurrency transaction security regulations have been enforced, as well as laws that prevent money laundering processes.
The Belarusian government is trying to set favorable conditions for the creation of the IT industry and, in particular, for blockchain. On March 28, 2018, a law was adopted stating that Bitcoin and cryptocurrencies are officially recognized by Belarus. According to the decree, all-digital money operations (ICOs, creation of cryptocurrency, and exchange, etc.) without restrictions are legal. Mining, production, acquisition, and transfer of tokens profit is not taxable. There is no obligation to pay VAT while transferring the rights of ownership of cryptocurrency to other people, including foreign organizations. It is not necessary to obtain a license to carry out technical information security activities. Therefore, Belarus succeeded in creating a mature export-oriented software development industry and became a major player in Europe’s IT services market.
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