In the United States, authorities are shifting from ad-hoc rulings to a more comprehensive, nationwide regulatory structure. The GENIUS Act has been enacted, while other legislative proposals, such as the Clarity Act and the CBDC Surveillance Act, are still under consideration. Crypto ETFs are gaining momentum, evidenced by significant trading activity.
Canadian regulators treat crypto investment firms as money service businesses, and digital currencies are taxed similarly to physical commodities. A number of crypto ETFs, unavailable in the US market, are already being traded in Canada.
According to insights from Sanjay Kathuria, crypto can play a role in investment portfolios, but its allocation should be limited, underlining the necessity for careful involvement.
The United Kingdom started regulating digital currencies in 2020 and is crafting a more extensive regulatory system, expected to be implemented by 2026. Switzerland employs a systematic method, taxing crypto assets under existing income and wealth tax laws.
El Salvador made a landmark decision in 2021, becoming the first country to officially recognize Bitcoin as legal tender. Consequently, foreign investors are exempted from paying taxes on income derived from Bitcoin. Singapore regulates crypto exchanges and digital wallet providers through its Payment Services Act, established in 2019.
The European Union introduced its initial unified crypto regulations in 2023 with the Markets in Crypto Assets (MiCA) framework. MiCA aims to enhance investor protection and ensure financial stability within the crypto market.
Japan is planning to introduce a stablecoin pegged to the yen in 2025. Despite imposing restrictions on cryptocurrencies, China is exploring a privately-issued yuan stablecoin, alongside its central bank digital currency (CBDC). Hong Kong established regulations for stablecoins on August 1 of the current year.
Pakistan has established a Crypto Council and intends to accumulate a Bitcoin reserve. Bhutan permits tourists to use cryptocurrencies for purchasing goods, services, and travel-related expenses, positioning it as one of the most accessible nations for cryptocurrency users.
In India, the implementation of a national framework is still underway. Cryptocurrencies are classified as virtual digital assets according to Section 224A of the Income Tax Act. Profit derived from crypto assets is taxed at a rate of 30%, coupled with a 1% Tax Deducted at Source (TDS) on transactions.
Experts advise investors that while global acceptance of crypto assets is growing, the extent of exposure to these assets should be approached with caution.
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