OneArt

<p><strong>Quick Take</strong></p><ul><li>It’s almost impossible to ban cryptocurrency completely. So, there’re more countries trying to tax it than those trying to ban it.</li><li>The US, the UK, Germany, and Ukraine are called the top countries for crypto users.</li><li>In the UK, staking returns are subject to taxation.</li><li>And more things you need to know about the legal status of crypto worldwide.</li></ul><p>The White House is about <a href="https://www.bloomberg.com/news/articles/2022-09-20/house-stablecoin-bill-would-put-two-year-ban-on-terra-like-coins" rel="noopener noreferrer nofollow">to ban</a> algorithmic stablecoins for two years. Earlier, it announced completing a <a href="https://cointelegraph.com/news/white-house-publishes-first-ever-comprehensive-framework-for-crypto" rel="noopener noreferrer nofollow">framework</a> on crypto regulation. The U.S. Securities and Exchange Commission (SEC) <a href="https://www.bloomberg.com/news/articles/2022-07-29/why-crypto-flinches-when-sec-calls-coins-securities-quicktake" rel="noopener noreferrer nofollow">considers</a> some digital assets securities. The EU <a href="https://blog.chainalysis.com/reports/eu-cryptocurrency-regulations-july-2022-part-2/" rel="noopener noreferrer nofollow">continues</a> developing its markets in crypto-assets (MiCA) rules. Even Binance <a href="https://www.binance.com/en/blog/from-cz/binance-global-advisory-board-to-propel-the-future-of-web3-3431940177286343206" rel="noopener noreferrer nofollow">joined</a> the race and created an advisory board to ensure “responsible regulation.” Should we be worried?</p><p>OneArt examines a subject to understand what’s going on in the crypto space regulation now, how it may change soon, and how it might impact average holders.</p><h2 id="header-0">The first rule of the crypto club is: there are no single rules</h2><p>Most countries don’t ban holding and using crypto, but its legal status varies depending on the geo. There’re many countries with no crypto taxes, as well as plenty of those where it’s subject to taxation.</p><p><img src="https://academy-public.coinmarketcap.com/optimized-uploads/0581cff69fa54e7fa3a1a6cd9d875eb0.png" /></p><p>For example, Brazil says crypto is an asset and subject to taxation and AML laws in certain contexts. <a href="https://www.cnbc.com/2021/09/07/el-salvador-buys-400-bitcoin-ahead-of-law-making-it-legal-currency.html" rel="noopener noreferrer nofollow">El Salvador</a> and the <a href="https://www.euronews.com/next/2022/04/27/central-african-republic-follows-el-salvador-in-making-bitcoin-legal-tender" rel="noopener noreferrer nofollow">Central African Republic</a> officially recognize it as a legal tender, i.e., a means of payment. <a href="https://www.cnbc.com/2021/09/08/ukraine-legalizes-bitcoin-and-cryptocurrencies.html" rel="noopener noreferrer nofollow">Ukraine</a> has legalized it, and exchanges can operate legally, but cryptocurrency is not a payment option.</p><p>The US watchdogs, such as the SEC, the Federal Reserve Board, etc., have different views on whether crypto should be regulated as securities, commodities, or currencies. But the latest <a href="https://cointelegraph.com/news/white-house-publishes-first-ever-comprehensive-framework-for-crypto" rel="noopener noreferrer nofollow">framework</a> is aimed to resolve these contradictions.</p><p>The European Union has developed the <a href="https://blog.chainalysis.com/reports/eu-cryptocurrency-regulations-july-2022-part-2/" rel="noopener noreferrer nofollow">MiCA</a> regulation to implement a unified licensing system for all its members. Currently, it <a href="https://blog.chainalysis.com/reports/eu-cryptocurrency-regulations-july-2022-part-2/" rel="noopener noreferrer nofollow">doesn’t provide</a> any rules for DeFi protocols. In the EU, crypto ban is rather impossible, but <a href="https://www.coindesk.com/policy/2022/10/18/eu-countries-must-be-ready-to-block-crypto-mining-commission-says/" rel="noopener noreferrer nofollow">mining might be blocked</a> amid the energy crisis.</p><h2 id="header-1">The most crypto-friendly countries</h2><p>It depends on the study and its criteria. For instance, the <a href="https://coincub.com/ranking/the-coincub-q2-global-crypto-ranking-categories-2022/" rel="noopener noreferrer nofollow">Coincub global ranking</a> includes these top economies:</p><p>The researchers considered <a href="https://coincub.com/ranking/the-coincub-q2-global-crypto-ranking-categories-2022/#sp_h_148311" rel="noopener noreferrer nofollow">nine criteria</a>, including government regulation, taxation, number of initial coin offerings (ICOs), exchanges, ATMs, and more.</p><p><img src="https://academy-public.coinmarketcap.com/optimized-uploads/d766babedd274af9aa120fee7c9c4187.png" /></p><p>The Merchant Machine research <a href="https://www.euronews.com/next/2022/08/16/ukraine-now-ranks-second-in-the-world-for-crypto-use-which-other-countries-have-embraced-i" rel="noopener noreferrer nofollow">took into account</a> the number of crypto owners, businesses accepting payments with cryptocurrencies, and the number of BTC ATMs. According to this study, the US, Ukraine, and the UK are the top three countries for those holding digital assets.</p><h2 id="header-2">Which countries banned crypto?</h2><p>It’s <a href="https://decrypt.co/37366/can-a-country-actually-ban-bitcoin" rel="noopener noreferrer nofollow">almost impossible</a> to shut it down completely, as it relies on decentralized technologies. But some countries <a href="https://www.thomsonreuters.com/en-us/posts/wp-content/uploads/sites/20/2022/04/Cryptos-Report-Compendium-2022.pdf" rel="noopener noreferrer nofollow">came up with ban</a>:</p><ul><li>Algeria</li><li>Bangladesh</li><li>Bolivia</li><li>China</li><li>Colombia</li><li>Egypt</li><li>Iran</li><li>Morocco</li><li>Turkey.</li></ul><p>How these rules work is another good question. In many countries that have cracked down on bitcoin and other blockchain-based assets, there are still many users and businesses accepting those assets, e.g., in Colombia (see below).</p><h2 id="header-3">Where can I pay with crypto?</h2><p>As we mentioned before, it’s a legal tender only in the Central African Republic and El Salvador so far. However, there’re more places where you can pay with cryptocurrencies. Coinmap lists <a href="https://coinmap.org/view/#/world/51.89005394/7.03125000/4" rel="noopener noreferrer nofollow">29,978 venues</a>.</p><p>Here’s a <a href="https://merchantmachine.co.uk/global-adoption-of-crypto-payments/" rel="noopener noreferrer nofollow">list by Merchant Machine</a>:</p><p><img src="https://academy-public.coinmarketcap.com/optimized-uploads/58e4354ecaee49b7a589db7f7d3a58fb.png" /></p><h2 id="header-4">Which big-name companies accept payments with cryptocurrencies?</h2><ul><li>AT&amp;T</li><li>CheapAir</li><li>Gyft</li><li>Gucci (in the US)</li><li>Microsoft</li><li>Overstock</li><li>PayPal</li><li>Starbucks</li><li>Twitch</li><li>Virgin Airlines</li><li>Whole Foods.</li></ul><h2 id="header-5">Where can I use crypto ATMs?</h2><p>There are <a href="https://news.bitcoin.com/the-number-of-cryptocurrency-atms-installed-worldwide-surpasses-39000/" rel="noopener noreferrer nofollow">more than 39,000</a> such ATMs all over the world, with <a href="https://coinatmradar.com/charts/geo-distribution/" rel="noopener noreferrer nofollow">nearly 90%</a> located in the US and just 6.3% in Canada, and 3.8% in Europe.</p><p><img src="https://academy-public.coinmarketcap.com/optimized-uploads/c36d2826c49d4cf4ae863fe102f207cd.png" /></p><h2 id="header-6">Where is crypto taxable?</h2><p>Not all countries have already decided whether it’s <a href="https://www.lx.com/money/cryptocurrency/where-is-crypto-legal-this-map-can-help/54532/" rel="noopener noreferrer nofollow">subject to taxation</a>. Here are some of those where cryptocurrency is taxable:</p><ul><li><a href="https://thelawreviews.co.uk/title/the-virtual-currency-regulation-review/argentina#:~:text&#61;for%20resident%20individuals%2C%20the%20gain,Argentine%20or%20foreign%20source%29%3B" rel="noopener noreferrer nofollow">Argentina</a></li><li><a href="https://www.bmf.gv.at/en/topics/taxation/Tax-treatment-of-crypto-assets.html#:~:text&#61;Pursuant%20to%20Section%2027a%20para,the%20taxation%20of%20other%20income." rel="noopener noreferrer nofollow">Austria</a></li><li><a href="https://thelawreviews.co.uk/title/the-virtual-currency-regulation-review/belgium" rel="noopener noreferrer nofollow">Belgium</a></li><li><a href="https://thelawreviews.co.uk/title/the-virtual-currency-regulation-review/brazil" rel="noopener noreferrer nofollow">Brazil</a></li><li><a href="https://thelawreviews.co.uk/title/the-virtual-currency-regulation-review/canada" rel="noopener noreferrer nofollow">Canada</a></li><li><a href="https://thelawreviews.co.uk/title/the-virtual-currency-regulation-review/france" rel="noopener noreferrer nofollow">France</a></li><li><a href="https://thelawreviews.co.uk/title/the-virtual-currency-regulation-review/germany" rel="noopener noreferrer nofollow">Germany</a></li><li><a href="https://thelawreviews.co.uk/title/the-virtual-currency-regulation-review/india" rel="noopener noreferrer nofollow">India</a></li><li><a href="https://thelawreviews.co.uk/title/the-virtual-currency-regulation-review/japan" rel="noopener noreferrer nofollow">Japan</a></li><li><a href="https://thelawreviews.co.uk/title/the-virtual-currency-regulation-review/new-zealand" rel="noopener noreferrer nofollow">New Zealand</a></li><li><a href="https://thelawreviews.co.uk/title/the-virtual-currency-regulation-review/singapore" rel="noopener noreferrer nofollow">Singapore</a></li><li><a href="https://thelawreviews.co.uk/title/the-virtual-currency-regulation-review/united-arab-emirates" rel="noopener noreferrer nofollow">The UAE</a></li><li><a href="https://www.gov.uk/hmrc-internal-manuals/cryptoassets-manual/crypto40050" rel="noopener noreferrer nofollow">The UK</a></li><li><a href="https://pro.bloomberglaw.com/brief/cryptocurrency-laws-and-regulations-by-state/" rel="noopener noreferrer nofollow">The US</a>.</li></ul><p>However, the rules and tax amounts vary. Moreover, even though there’re some guides, complying with the rules may be complicated. For example, in the UK, crypto taxes should be paid on <a href="https://www.coindesk.com/policy/2022/02/02/uk-tax-regulator-updates-guidance-on-staking-and-defi-lending/" rel="noopener noreferrer nofollow">returns from staking and DeFi lending</a>. But it depends on whether the watchdog considers them revenue or capital. And it’s hard to define the type of the return, the tax agency says.</p><p>In Switzerland, crypto regulation makes the country an attractive hub for users and projects. But it&#39;s crucial to distinguish between <a href="https://www.internationaltaxreview.com/article/2a6aafin5m44mse0zz9xd/swiss-tax-authorities-provide-additional-clarity-on-crypto-taxation" rel="noopener noreferrer nofollow">private investing and self-employed trading</a>. The first is tax free.</p><p><img src="https://academy-public.coinmarketcap.com/optimized-uploads/1c03de14a75445dfbc1a880a36754b0e.png" /></p><p>According to Coincub, the <a href="https://coincub.com/ranking/coincub-annual-crypto-tax-ranking-2022/#sp_h_20285" rel="noopener noreferrer nofollow">top 5 ‘havens’</a> with significant advantages for investors include the Bahamas, Bermuda, Belarus, the UAE, and the Central African Republic.</p><h2 id="header-7">What may change soon?</h2><p>The crypto industry regulation is still in its infancy, and we are highly likely to see many changes shortly. Authorities in many countries are concerned about <a href="https://www.cnbc.com/2022/08/10/crypto-criminals-laundered-540-million-using-renbridge-elliptic-says.html#:~:text&#61;A%20major%20way%20criminals%20in,dollar%20amounts%20are%20getting%20large." rel="noopener noreferrer nofollow">money laundering</a>, terrorist financing, and tax evasion. Some experts even <a href="https://coinmarketcap.com/alexandria/article/bitcoin-could-double-in-price-if-regulated-by-the-cftc-chairman-claims" rel="noopener noreferrer nofollow">claim</a> clear regulation could help digital currencies grow in price.</p><h3 id="in-the-us">In the US</h3><p>As we mentioned before, the US authorities have released a <a href="https://blog.chainalysis.com/reports/white-house-crypto-framework/" rel="noopener noreferrer nofollow">framework on crypto</a>. It doesn’t implement new rules but specifies what they should look like. It focuses on several areas:</p><ul><li>Combating illegal finance</li><li>Ensuring financial stability</li><li>Protecting crypto holders, investors, and businesses</li><li>Boosting competitiveness</li><li>Reducing energy consumption</li><li>Exploring CBDC.</li></ul><p>More specific measures regard stablecoins. The White House has issued a draft bill that plans <a href="https://decrypt.co/110208/stablecoin-law-ban-terra-luna" rel="noopener noreferrer nofollow">to ban</a> algorithmic stablecoins for two years. The authorities say this type of token isn’t “fully backed by reserve assets” and needs to be studied so as not to let <a href="https://www.coindesk.com/learn/the-fall-of-terra-a-timeline-of-the-meteoric-rise-and-crash-of-ust-and-luna/" rel="noopener noreferrer nofollow">Terra Luna</a>-like crash happen again.</p><h3 id="in-the-eu">In the EU</h3><p>The European Parliament has finally agreed on its Markets in Crypto-Assets (MICA) rules (<a href="https://blog.chainalysis.com/reports/eu-cryptocurrency-regulations-july-2022-part-1/" rel="noopener noreferrer nofollow">1</a> and<a href="https://blog.chainalysis.com/reports/eu-cryptocurrency-regulations-july-2022-part-2/" rel="noopener noreferrer nofollow"> 2</a>). They regard value threshold, stablecoin issuers, market manipulation, climate impact, and personal wallets. The requirement to verify identity when transferring assets to/from unhosted wallets has been removed. The rules are <a href="https://www.coindesk.com/policy/2022/10/10/lawmakers-back-eus-mica-crypto-law-in-committee-vote/" rel="noopener noreferrer nofollow">scheduled to come into effect in 2024</a>.</p><p>However, the rule that DAOs, DeFi protocols, NFT, and metaverse should comply with the AML regulation remains in the plan so far. It means they will have to meet the rules when dealing with transactions over €1,000.</p><h3 id="in-the-uk">In the UK</h3><p>After the Merge, staking is expected to become more popular. And costly, as earnings from staking are taxable (see above). Experts say it’s also a <a href="https://www.bloomberg.com/news/articles/2022-09-27/staking-after-ethereum-eth-merge-could-cause-tax-issues-in-uk" rel="noopener noreferrer nofollow">problem for the system</a>. In the UK, you don’t usually file tax returns unless you invest in something. With staking taxes, authorities will get more work, as <a href="https://beincrypto.com/as-pound-crumbles-a-third-of-uk-citizens-now-own-cryptocurrency/" rel="noopener noreferrer nofollow">more than 1/3</a> of the British own crypto.</p><h2 id="header-8">To recap</h2><p>Merchant Machine expects crypto use to <a href="https://merchantmachine.co.uk/global-adoption-of-crypto-payments/" rel="noopener noreferrer nofollow">grow by almost 15%</a> globally by 2030. The more it increases, the more regulatory issues arise. Amid the Terra Luna crash, the growing number of scams and hacks, security problems, etc., the industry needs transparent regulations to make it safer and ensure mass adoption.</p><p>The point is authorities have to find the golden mean between regulating and evolving the crypto space. The watchdogs have not kept up with the rapidly developing industry so far. We’ll see if they manage to. Stay in touch!</p><h2 id="header-9">Follow official OneArt channels to find the latest info and updates:</h2><ul><li><a href="https://twitter.com/art_wallet" rel="noopener noreferrer nofollow">Twitter</a></li><li><a href="https://t.me/art_wallet" rel="noopener noreferrer nofollow">Telegram Group</a></li><li><a href="https://t.me/artwallet_official" rel="noopener noreferrer nofollow">Telegram Announcements</a></li><li><a href="https://coinmarketcap.com/community/profile/OneArt" rel="noopener noreferrer nofollow">CoinMarketCap Community</a></li><li><a href="https://www.linkedin.com/company/oneart/" rel="noopener noreferrer nofollow">LinkedIn</a></li></ul>

Payments, Taxes & Tax Havens. Your Crypto Regulation Guide

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