Whenever the G7 nations meet, there is something of the utmost importance that needs to be discussed. On Monday, the U.S. Treasury Secretary Steven Mnuchin hosted a meeting with central bank governors and finance ministers from Canada, France, Germany, Italy, Japan, the European Commission, the U.K., and the Euro group. Also, in attendance were heads of the World Bank, the International Monetary Fund (IMF), and the Financial Stability Board (FSB).
This meeting was called to discuss the coronavirus pandemic’s impact on the nation’s economies and the best way to revive said economies. Additionally, one of their biggest agendas also revolved around the landscape of crypto assets and how to ensure that these funds aren’t used for malicious and illicit activity. The ministers and governors reiterated the importance of regulating this market as its potential for misuse was quite high. Earlier in October, the G7 released a joint statement on the matter of digital payments seeking to regulate exchanges and markets where people can buy and sell digital currencies without proper documentation.
Concern’s over Facebook’s Libra currency
Over the past year, Facebook has been in a tough spot regarding their cryptocurrency Libra. It was renamed Diem in Germany and Europe. Many countries have declined to accept the altcoin citing numerous regulatory loopholes that would be quite troublesome. German Finance Minister Olaf Scholz raised his concerns on the matter, saying that the regulatory holes that haven’t been addressed should first be taken care of before the stable coin is launched in these countries. The minister warned that letting corporations dictate currency policy and direction was very dangerous without smoothing over the bumps.
Crypto regulations around the world
In the United States, cryptocurrencies are not considered legal tender. However, you are allowed to make purchases using these currencies so long as the business in question allows it. Additionally, crypto exchanges are legal, but several conditions need to be met for anyone to work on them. For instance, the Securities and Exchange Commission (SEC) made it mandatory for exchanges to implement Know Your Customer (KYC) regulations before serving anyone on their platforms. This will often take the form of the client uploading their legal identification documents.
The Japanese government has taken appropriate steps to ensure that crypto is recognized and protected under the law. In this country, crypto, such as Bitcoin, is legal and considered property under the law. Their progressive regulatory policies on cryptocurrencies make them a major hub for crypto activity in all of the east. Here, exchanges are also legal but highly regulated by the Financial Services Agency. Because the country is one of Bitcoin’s biggest markets, gains on the cryptocurrency attract a 15%-55% tax as ‘miscellaneous income.
In the U.K., cryptocurrencies are allowed but aren’t considered legal tender, although they are accepted in some stores. Here, companies are permitted to operate crypto exchanges provided that you fulfill the requirements and register with the Financial Conduct Authority (FCA). Although crypto laws aren’t as vast here, they still exist. For instance, crypto is considered to be in a class of its own. Although it cannot be compared with regular investments, the government still taxes the commodity under capital gains tax.
Cryptocurrencies in the E.U. are considered legal tender, meaning you are free to use them as you would with fiat currencies. However, the E.U. restricts member states from introducing their own cryptocurrencies to prevent undue competition and disrupt the existing harmony. Although these digital assets are accepted throughout the region, exchange regulations vary from state to state. The rate of taxation also varies in each state and you can expect to pay capital gains on taxes at the rates of between 0-50percent.