El Salvador to accept Bitcoin as legal tender: Here's a look at crypto regulations in other countries
Many countries such as the US, the UK and Singapore have clear and dedicated laws on crypto assets and currencies. These can be used by India as reference points
While India is still in the middle of framing cryptocurrency regulations, El Salvador’s President Nayib Bukele said on June 5 that he plans to make Bitcoin legal tender in the country. “In the short term this will generate jobs and help provide financial inclusion to thousands outside the formal economy,” Bukele said in a video shown at the Bitcoin 2021 conference in Miami.
There are many countries that are now moving towards taking digital currencies to the next level. Consider this: Progressive Care, a Florida healthcare company has said it will accept Bitcoin as payment for its Covid-19 rapid testing services from those coming to the Bitcoin 2021 conference.
How should Indians look at the development?
“We have seen how other nations have evolved. What I feel is there are three locations that are doing a lot of things. One is Wyoming in the US, the second in the UK and the third is Singapore. Primarily these three locations are where you find most of these activities, especially from the regulation perspective. In 2019, 13 blockchain laws in Wyoming in the US were passed and now these are officially shown up on the website of Wyoming State, which goes to show that they are recognising crypto assets as digital assets. Secondly in the UK, Her Majesty’s Revenue and Customs (HMRC), which is equivalent to the tax authority of India, has said it can be considered as a capital asset. It should not be construed as a payment system because that’s a sovereign function,” Varun Sethi, the blockchain lawyer told Money9.
Sethi added: “However, we should not miss out on the opportunity what Singapore did. Singapore very nicely last year stated that if you have a certain coin that you want to sell to a Singapore citizen then you need to get an opinion from a Singapore lawyer stating that this coin is a utility token and this is what this token can do and only after whitelisting that token does get listed. Those are legal literature that can be used as references.”
Crypto’s status in other countries
Similarly, a large number of countries such as Estonia, Belarus and Malta have dedicated laws on crypto assets and currencies. For instance, the President of the Republic of Belarus permitted the local residents to buy and sell crypto assets. Similarly, cryptocurrency exchange businesses in Japan are regulated by the Payment Services Act. Cryptocurrency exchange businesses in Japan have to be registered and take all measures to protect customers
“Currently, Section 4 of The IT Act in India has given a legal sanction for the electronic record. Now the question is when an electronic record gets converted into digital currency. Till now we only have paper currency. A legal framework for digital currency is needed. We have to wait and watch as cybersecurity parameters are not cleared,” said Pavan Duggal, Advocate of Supreme Court of India and founder of Pavan Duggal Associates.