Cryptocurrency is a phenomenon of the world economy that functions unattached to any particular country. Turnover of Bitcoin or ether in the world cannot be prohibited by the decision of the government. But legislative regulation by local authorities makes the use of crypto legitimate on the territory or country. It can be fully prohibited and thereby get out of use. Its turnover may also be allowed by a country. In this case, cryptocurrency can be used as a medium of exchange, as goods or a method of investment and capital maintenance.
The attitude of the State to the cryptocurrency turnover
The main obstacle on the way to the recognition of crypto is its decentralization and inability of local authorities to control settlements. On the one hand, it gives full international economic relations. On the other, it facilitates laundering of proceeds of crime and development of the black economy.
All countries of the world could be conditionally divided now in to three groups according to methods of crypto regulation on their territories:
- Legislative recognition of cryptocurrency and its approval. This method is chosen by the world’s major economies, however they assign different legal statuses to crypto. For example, it can be a subject of sale like securities, an instrument of payment like fiat money or a financial asset. Sometimes cryptocurrency is banned to be used by legal entities etc.
- Absolute prohibition of cryptocurrency. Such position is taken up by the countries where the use of such payment instrument is prohibited due to religious or national peculiarities, or in the countries of authoritarian or totalitarian regimes where crypto may lead to the loss of control over population. Cryptocurrency is also prohibited in the countries where free use of this payment instrument may weaken the economy.
- Wait-and-see attitude. This position is taken up by most countries. Such countries have not accepted regulations on a legislative or governmental level to have crypto turnover under control. At the same time its use is not prohibited as well. In most cases wait-and-see attitude is conditioned by the necessity to generalize the global experience, to study the impact of cryptocurrency on a national economy.
The supranational status of cryptocurrencies has its own advantages. Rates of bitcoin, ether and other virtual currencies do not depend on a national economy or financial condition in a certain region of the world. While international settlements can not be suspended at the decision of local authorities.
However, recognition of cryptocurrency in every country will make this payment instrument more popular and contribute to its further development.