In the background
The initial offering of coins on blockchain platforms colored the world red for technology startups around the world. The decentralized network, which can distribute tokens to consumers supporting an idea with money, is both revolutionizing and rewarding.
Profitable bitcoin proved to be an “asset” for early investors, giving multiple returns in 2017. Investors and cryptocurrency exchanges around the world took the opportunity to write huge profits for themselves, leading to the rise of many online exchanges. Other cryptocurrencies such as Ethereum, Ripple and other ICOs promise even better results. (Ethereum grew more than 88 times in 2017!)
While ICOs put millions of dollars in the hands of startups over several days, governing governments initially chose to monitor the fastest development of fintech, which has ever had the potential to raise millions of dollars in a very short period of time.
Countries around the world are considering regulating cryptocurrencies
But regulators have become cautious as the technology and its main effects have gained popularity, as ICOs have begun to consider billions of dollars’ worth of money – Š-â € Št, also on proposed plans written on whiteboards.
At the end of 2017, governments around the world took the opportunity to intervene. While China has banned cryptocurrencies altogether, the SEC (Securities and Exchange Commission) in the United States has highlighted the risks posed to vulnerable investors and proposed treating them as securities.
A recent warning from SEC President Jay Clayton, issued in December, warned investors that
“Please also recognize that these markets span national borders and that significant trading of systems and platforms can take place outside the United States. Your invested funds can travel quickly abroad without your knowledge. As a result, the risks may be increased, including the risk that market regulators, such as the SEC, may not be able to effectively prosecute bad participants or recover funds. “
This was followed by India’s concerns, where Finance Minister Arun Jayli said in February that India did not recognize cryptocurrencies.
A circular sent by the Central Bank of India to other banks on April 6, 2018, required banks to sever ties with companies and exchanges involved in trading or transactions in cryptocurrencies.
In the UK, the FCA (Financial Conduct Authority) announced in March that it had set up a cryptocurrency working group and would seek assistance from the Bank of England to regulate the cryptocurrency sector.
Different laws, tax structures in different nations
Cryptocurrencies are primarily coins or tokens placed on a cryptographic network and can be traded worldwide. While cryptocurrencies have more or less the same value worldwide, countries with different laws and regulations can provide differentiated returns for investors who may be nationals of different countries.
Different laws for investors from different countries would make calculating the return a tedious and cumbersome exercise.
This would involve investing time, resources and strategies that cause unnecessary prolongation of processes.
Instead of many countries drafting different laws on global cryptocurrencies, there should be a constitution of a single global regulatory authority with laws enforcing across borders. Such a move would play an important role in improving legal cryptocurrency transactions around the world.
Global organizations such as the United Nations (UN), the World Trade Organization (WTO), the World Economic Forum (WEF), and the International Trade Organization (ITO) already play an important role in uniting the world on various fronts.
Cryptocurrencies were formed with the basic idea of transferring funds around the world. They have more or less similar value on exchanges, except for minor arbitrage.
The global regulatory body for the regulation of cryptocurrencies around the world is the need of the hour and can establish global rules to regulate the latest way of financing ideas. Currently, each country is trying to regulate virtual currencies through legislation that is being drafted.
If economic superpowers with other countries can reach a consensus by introducing a regulatory body with laws that know no national borders, this would be one of the biggest breakthroughs in designing a crypto-friendly world and would stimulate the use of one of the most transparent fintechs. system everâ € š-â € Š blockchain.
A universal regulation consisting of parts related to cryptocurrency trading, returns, taxes, sanctions, KYC procedures, exchange laws and penalties for illegal hacks can give us the following advantages.
This can make calculating profits super easy for investors around the world, as there will be no difference in net profit due to the same tax structures
Countries around the world may agree to share a portion of the profits as taxes. Therefore, the share of countries in taxes collected will be the same worldwide.
The time associated with the constitution of numerous committees, the drafting of bills, followed by discussions in the legislative arena (such as the Parliament in India and the Senate in the United States), can be saved.
It is not necessary to go through the tense tax laws of every country. Especially those involved in multinational trade.
Even companies offering tokens or ICOs would comply with the aforementioned “international law”. Therefore, calculating post-tax income would be a walk for companies
The global structure will require more companies to offer better ideas, thus increasing employment opportunities around the world.
The law may be assisted by an international supervisory authority or global currency regulator, which may have the power to blacklist a non-compliant ICO.
Not all advantages are when it comes to a law that governs cryptocurrencies around the world. There are certain disadvantages as well.
It may take time for global financial leaders to come together and draft a law. Discussions and consensus building can be challenging
States or economies that provide tax-free structures may not agree to adopt a law that provides for a universal tax policy
Global observer or regulatory intervention in monitoring ICO-related regulatory developments may not work well with some countries
Universal law can lead to the division of the world into factions. Countries that do not support cryptocurrency, such as China, may not be part of it.
The law may be an idea of economically strong states that could invent it in their best interest.
This law would be centralized with a global regulatory body, unlike cryptocurrencies, which are decentralized.
The world is together for the better. Whether it’s creating a peaceful world after World War II or joining forces for better trade laws and treaties.
The International Trade Organization (ITO), the World Trade Organization and the World Economic Forum have some of the best brains that define the global economy.
They can come together and be part of a body that will determine the world’s economic prosperity. They would help develop global cryptocurrency standards and could be part of the regulator, which will be a guide and a beacon for thousands of ICOs around the world for the better. This may take time at first, but it would make things easier for future times.