International Regulations For Cryptocurrencies Will Create Win-Win Situations

 

The background

Tech-startups around the globe have been hit hard by the initial coin offering on blockchain platforms. It is revolutionary Native american crypto currency and rewarding to have a decentralized network that can distribute tokens to users who support an idea with money.

The profit-making Bitcoin proved to be an "asset" for early investors, generating huge returns in 2017. The opportunity offered huge returns to investors and Cryptocurrency exchanges around the globe, which led to the ascent of many online exchanges. Ripple, Ethereum and other ICOs promise even greater results. (Ethereum grew more than 88x in 2017!)

ICOs landed millions in startups' hands within days. However, the ruling governments initially chose not to pay attention to the fastest fintech development that could raise millions of money in a short time.

All over the world, countries are considering regulating cryptocurrencies.

Regulators became more cautious as the technology gained popularity. ICOs began to raise billions of dollars annually, and they also started writing whitepapers about proposed plans.

In late 2017, governments around the globe seized the chance to intervene. China bans cryptocurrency altogether. However, the SEC (Securities and Exchange Commission), in the US, has highlighted the risks that vulnerable investors face and proposed to treat them like securities.

Investors are reminded by Jay Clayton, SEC Chairman, in a December warning statement.

Please also remember that these markets cross national borders and that trading can occur on platforms and systems outside of the United States. You may not be aware that your invested funds could travel abroad quickly. There are many risks associated with this, including the possibility that market regulators such as the SEC may not be able effectively pursue bad actors and recover funds.

 

 

India raised concerns and Arun Jaitley, the Finance Minister, stated that India doesn't recognize cryptocurrencies.

 

On April 6, 2018, the Central Bank of India sent a circular to all banks asking them to cut all ties with exchanges and companies involved in trading or transacting cryptocurrencies.

The FCA (Financial Conduct Authority), in Britain, announced in March that it had formed a cryptocurrency task team and would seek assistance from the Bank of England to regulate cryptocurrency.

Different laws, tax structures across nations

Cryptocurrencies are coins and tokens that have been launched on a cryptographic network. They can be traded worldwide. Although cryptocurrencies are generally the same in value, investors from different countries may see different returns due to different laws and regulations.

Calculating returns for investors from different countries could be complicated due to the fact that there are many laws.

This would require investment of time, resources, and strategies that could lead to unnecessary delays.

The Solution

Instead of different countries drafting laws regarding global cryptocurrency, there should be a single global regulatory authority that applies across borders. This would be a significant step in increasing legal cryptocurrency trades around the globe.

Globally focused organizations such as the UNO, United Nations Organisation, World Trade Organisation(WTO), World Economic Forum/WEF, International Trade Organisations (ITO) and World Trade Organisations (WTO) have played an important role in unifying the world on various fronts.

The idea of transferring funds across the globe was the basis of cryptocurrencies. They are almost identical across exchanges with the exception of negligible arbitrage.

Global regulation authority for cryptocurrency across the globe is urgently needed. This might establish global guidelines for the regulation of this new mode of financing. Every country is currently trying to regulate virtual currency through legislation, which are in the process of being drafted.

If economic superpowers and other countries can reach a consensus to establish a regulatory authority that knows no national borders, this would be a major breakthrough towards creating a crypto-friendly world. It will also boost the use of the most transparent fintech systems ever created--the blockchain.

The following can be obtained from a universal regulation that includes subparts on cryptocurrency trading, returns and taxes, penalties and fines, KYC procedures, exchange laws, and punishments for illegal hackers.Advantages.

 

1. Investors around the globe will find it very easy to calculate profits as there is no difference in net profits due to the uniform tax structures
2. All countries may agree to share some of the profits as taxes. The tax collected by countries would then be equal across the globe.
3. It is possible to save time in forming many committees and drafting bills, followed by discussions in legislative arena (like the Parliament in India or the Senate in the US).
4. You don't have to go through the taxation laws in every country. Multinational traders are especially vulnerable.
5. Companies offering tokens and ICOs will be required to comply with this 'international law. Companies would find it easy to calculate post-taxation incomes.
6. Global structure would encourage more companies to come up with better ideas and increase employment opportunities around the globe.
7. An international regulatory body for global currencies or watchdog may assist in enforcing the law. They may be able to blacklist any ICO offering that is not compliant with the norms.

When it comes to a law that would regulate cryptocurrencies around the globe, it is not all positives. Certain things are certain.DisadvantagesYou can also find them here.

 

It might take time to bring together the world's top financial leaders and create a law. It might prove difficult to bring them all together and have meaningful discussions.

 

1. Some countries or economies that provide tax-free structures might not be willing to accept the universal taxation law
2. Some countries might not like the interference of the global regulator or watchdog in monitoring ICO-related regulatory developments
3. The universal law could lead to the world being divided into different factions. It is possible that countries which don't support cryptocurrency, such as China, won't be part of the global law.
4. Economically strong countries may invent the law to best serve their interests.
5. This law would be centralized and have a global regulator, unlike cryptocurrency which is decentralised.

Conclusion

 

The world has come together for the better. Be it the creation of a peaceful world following World War II or the coming together to improve trade laws and treaties.

Some of the most influential minds in global economics are found at the International Trade Organisation (ITO), World Trade Organisation (WTO) and the World Economic Forum.