The growth of crypto is attracting the attention of governments and regulatory bodies worldwide. The popularity of digital assets will continue to surge. Therefore, it's crucial for crypto enthusiasts, investors, and companies to understand the regulatory structure governing these assets. In this blog post, we will explore the key agencies in crypto regulation. We will also discuss their roles in shaping the current crypto landscape.
In the United States, the IRS is one of the key agencies in crypto regulation. It considers crypto as property for tax purposes, which means they're subject to capital gains tax when bought, sold, or traded. The IRS also requires individuals to report crypto holdings on their tax returns. This makes following the rules very important for U.S. citizens.
The SEC's primary goal is to protect investors, they also make sure that offerings and trading platforms comply with federal securities laws.
Individual member states in the European Union have varying ideas about how to operate. Therefore, key agencies in crypto regulation within the European Union navigate a complex landscape. Meanwhile, the EU Parliament has been working on creating a common regulatory framework for crypto and blockchain technology. The EU's MiCA (Markets in Crypto-Assets) proposal is a significant step towards creating a standard for crypto regulations within the EU.
As the UK's financial regulatory body, the FCA oversees crypto activities, aiming to prevent financial crime and protect consumers. It also enforces anti-money laundering (AML) and Know Your Customer (KYC) regulations for crypto companies operating within the UK.
China has been a pioneer in central bank digital currencies (CBDCs), with the PBOC leading the charge. While China has banned ICOs and crypto exchanges, it is working on its digital yuan, known as the Digital Currency Electronic Payment (DCEP) system.
Japan is known as one of the most crypto-friendly nations in Asia. The FSA regulates crypto exchanges. It also has a licensing system in place to ensure compliance with AML and buyer protection measures.
South Korea has also embraced crypto but with strict regulations. The FSC oversees crypto exchanges and complies with robust AML and KYC requirements. It aims to strike a balance between driving crypto growth and protecting buyers.
Many national central banks are considering the development of CBDCs. These initiatives often involve working together closely with other regulatory bodies and government agencies to ensure the smooth integration of digital currencies into the current financial system.
Numerous other bodies across the globe also play roles in regulating crypto and blockchain technology. These may include:
The actions and policies of regulatory bodies around the world have a direct impact on how you engage with crypto. Staying informed about these rules, complying with them, and making smart decisions are crucial steps to navigate the changing global crypto regulatory landscape. Failure to do so could lead to legal consequences and financial losses, emphasizing the importance of staying abreast of the ever-changing regulatory environment.
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