Bitcoin pain: where is global regulation?

Bitcoin has been developed for 10 years, this period has been because of the lack of effective supervision and controversial. Now all the countries in the world to develop the regulatory system, but it has not implemented, is the most important reason for bitcoin qualitative, it is too difficult!

Some countries will be characterized as “bond”, some countries are characterized as “illegal fund-raising”, cannot achieve global unified supervision. Today we will try to understand, bitcoin qualitative and supervision, whether the “nanzaihechu”.

A bitcoin violates the traditional definition of a “legal tender”

Generally speaking, is to rely on the central bank and currency reserves to achieve stable value. While bitcoin and currency supply, it is constant at 21 million, its price is determined by market supply and demand.

The vast majority of digital currencies are not bank endorsement and support, the price relative to the currency is not stable, the market fluctuations will have severe risk assets shrink.

And like USDT stable currency, although FERTEL claimed to have credit bank security audit, and the 1:1 anchor enough margin dollars, but there are still malicious super phenomenon. It also reflects the fact that digital assets finally also need from non digital assets as support and guarantee.

Like the recent European peace, political instability, but the euro currency is still showing more than digital currency economic safety and stability. So bitcoin can not be characterized as “legal tender” and equal status, naturally can not in accordance with the existing system of supervision.

The tax classification two, bitcoin is not clear

Bitcoin also exists in the complexity of multi jurisdictional tax classification, which makes the supervision of bitcoin difficult.

The current system in the UK, the largest bitcoin tax problem lies in the use of different status:

If is traded with bitcoin, apply the income tax system; If the bitcoin as an investment product, is subject to capital gains tax; If the person is gambling behavior, is another matter.

In the United States, many states are very welcome to bitcoin. For example, in New York, if you get the New York financial services licence issued by the Department of bitcoin, can carry out compliance of financial activities, and can pay taxes to pay taxes in accordance with the relevant laws and regulations. In Ohio, bitcoin transactions are legitimate, you can even use bitcoin to pay taxes.

But there are many places in the attitude of bitcoin is unknown, therefore, how the bitcoin tax classification also depends entirely on the jurisdiction of the user environment.

Three, bitcoin is “money” or “assets”?

Many people do not understand, “digital currency” and “digital assets” is actually two concepts. Strictly speaking, the difference between the two is that digital currency could replace the tangible currency, and the number of assets is only a part of the economy.

If the bitcoin as a digital currency to monitor, then it will not only be the existing tax system constraints, also need to be added to regulatory constraints in the foreign exchange market.

If the bitcoin as digital assets supervision, so they are a kind of financial instruments and derivatives, are generally not subject to the existing tax system constraints.

For example, in Europe, in order to protect the interests of consumers, including stocks, funds, enhance the fixed interest of all asset classes of transparency, the European countries have adopted legislation — “market in Financial Instruments Directive” framework of EU financial market supervision supervision, to ensure that the interests of consumers are not violated.

At present, some countries tend to bitcoin as a securities similar to digital assets, rather than money.

Four, the global unified regulatory standards, regulatory arbitrage can not be avoided

Needless to say, due to geographical restrictions and jurisdictions across the globe, the regulatory treatment of bitcoin has the huge difference. In fact, in many jurisdictions, legal and regulatory simply do not recognize this “to the center of token”.

Regulatory arbitrage has always been the lifeblood of the financial services industry, although it is helpful to a certain extent to eliminate regulatory loopholes in the policy, but there is not a small problem. If multiple jurisdictions have different regulatory system, regulatory arbitrage means that the company may be offshore, in another jurisdiction to set up branches.

For example, if a British company that Malta to block chain and digital assets policy more friendly, and the business moved to Malta, then investors will lead to synchronous transfer, which will not only increase the risk of investment, but also make the original jurisdiction of the loss of potential revenue in the future.

This is what we say “appears in the domestic law, but in foreign crazy money”. This phenomenon is a big problem in multi jurisdictional supervision.

1000 people have 1000 heart Hamlett. Each country qualitative bitcoin, naturally leads to different legislative framework. There is no standard regulatory model for bitcoin worldwide, this is not the currency bitcoin with a big pain point on an equal footing.

The recent G20 meeting proposed a FATF standard, whether it can smoothly become the crypto currency regulation, is worth watching.

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