With the rise of cryptocurrency, the rush to build a regulatory framework seems to touch the sky. Following the unprecedented occurrence when cryptocurrency saw a sudden rise in 2017 when investors and governments alike, could no longer ignore the growth of decentralized finance, it has fascinated the world increasingly by enabling greater access, such as being able to transfer the funds to remote places or securing capital for small businesses.
To cater to the rising need, cryptocurrency regulations have been introduced slowly into global financial markets. These regulations are made and introduced so that they can keep a check on the emergence of digital currencies, and also allow for clearer guidelines and a measure of security. Cryptocurrency has progressively been embraced by speculative investors, but it is yet to be approved by the majority, as a viable form of money.
We usually see that these sorts of things face technical challenges due to which there is a lack of trust in the issuing authorities and for understanding the technicality behind it, many of the supporters of cryptocurrency claim that these platforms are not trustworthy, which means that they are not directly tied to any nation-state, government or body, and for that the proof of work is required, which needs to be performed to create a new group of trust-less transactions on a distributed ledger called blockchain, because of which all the network’s miner compete to be the first one to find a solution for the mathematical problem that concerns the candidate block, which cannot be solved in other ways than through brute force, essentially requiring a huge number of attempts and when they finally get to know the right solution, he/she announces it to the whole network at the same time, receiving a cryptocurrency prize provided by the protocol. Some supports also like the fact that cryptocurrency removes central banks from handling the money supply since these banks tend to reduce the value of money via inflation. Some also like cryptocurrency as their value is going up and have no interest in the currency’s long-term acceptance to move money.
Now the question is that how many cryptocurrencies are there, and what is their worth, so to answer your question, there are more than 6,700 different cryptocurrencies that have been traded publicly according to coinmarket.com, which is a market research website. Cryptocurrency continues to produce money through initial coin offerings or ICOs. Currently, the value of all the cryptocurrency as of Feb 18th 2021, was more than $1.6 trillion, bestowed by CoinMarketCap, and the total sum up of all the bitcoins was pegged at about $969.6 billion. Till now the best cryptocurrencies by market capitalization are Bitcoin, Ethereum, Tether, Binance Coin, Cardano, Polkadot, XRP, Litecoin, Chainlink and Bitcoin Cash, and the value of these coins according to the CoinMarketCap varies between $13.1 to $969.6 billion.
Throughout the world, different approaches are being taken regarding the regulation of cryptocurrency, and the landscape is still evolving, but the government is slow in either way, because of which I would like you to focus on the list of countries around the world. In the United States, laws vary state by state and in some parts of the US cryptocurrencies are legal, in the European Union cryptocurrencies are considered legal but the rules for exchanges differ from state to state and taxation also varies ranging anywhere from 0% to 50%, in the United Kingdom cryptocurrency is not considered legal, although its exchange is legal, and the taxability of cryptocurrency highly depends on the activities and the parties involved, although its gains and losses are subjected to capital gains tax. In Russia cryptocurrency was considered as a substitute for money but now after the laws introduced in 2019, it has been illegal. Also, new ideas are being proposed which could allow cryptocurrency to be confiscated.
Unlike other countries, cryptocurrency is illegal in China, the financial institution for handling Bitcoin transactions was banned by the People’s Bank of China, and ICOs and domestic cryptocurrency exchanges were also banned in 2017. In India, cryptocurrency has faced an uphill battle, the currency has been recognised as legal, but after facing the Reserve Bank of India in court it was banned. Presently, cryptocurrency is not banned in India, but the battle in court is not over. The future of cryptocurrency is touching the sky and will be attractive for people to see how it plays.
The factors which affect bitcoin price the most, are the regulations imposed by the government, also its rise has always been arrested every time the government has cracked the policy. It has been blamed on the banks in India that the bitcoin’s price has been falling which has tightened the screws of cryptocurrency exchanges. The regulation of cryptocurrency varies from country to country and state to state.
Some countries have welcomed this innovation, while others want it to get banned. Despite some countries wanting to abolish cryptocurrency, it continues to grow across the globe. The main concern of cryptocurrency revolves around the potential it has to be used for money laundering and terrorist financing. However, it has never involved in any major scandals. As time passes, we will get to know how cryptocurrency regulations develop, and this will take place when the Financial Action Task Force will introduce guidelines for countries to follow in case of cryptocurrency regulation, and the introduction of the Crypto bill will be made and welcomed soon. When a billionaire hums the tune, the investor begins to dance.