Question 1

Where is crypto legal?

Accepted Answer

Cryptocurrencies are legal in 100+ countries, including the US, Canada, and the EU Member States. Only nine countries have officially banned crypto transactions. Meanwhile, 42 countries have implicit bans, which typically means that financial institutions may not provide services to crypto businesses.

Question 2

How are cryptocurrencies different from the US dollar and other fiat currencies?

Accepted Answer

Unlike fiat currencies, cryptocurrencies are not issued or backed by central banks — instead, they function on distributed networks called blockchains. Owners of digital wallets can send and receive coins and tokens anywhere in the world, and all transactions are publicly traceable and immutable.

Question 3

How is crypto regulated around the world?

Accepted Answer

Regulation varies geographically, as different countries and even US states treat crypto differently. Some existing approaches regard cryptocurrencies on par with property or commodities, but the West is generally moving toward unified frameworks tailored to digital assets.

Question 4

Why did China ban cryptocurrencies?

Accepted Answer

In 2021, China banned Bitcoin mining and crypto transactions, citing concerns about financial crime and a potential threat to economic stability. The government also wanted to curtail capital flight and eliminate carbon emissions from miners to achieve carbon neutrality. However, this ban has proved ineffective.

Question 5

What is El Salvador's Bitcoin law?

Accepted Answer

In 2021, El Salvador made Bitcoin legal tender — a legally valid means to make payments and settle debts. Financial inclusion improved and international remittances became cheaper, but the accompanying technical, logistical, and communication failures caused outrage. Contrary to the initial expectations, BTC has not hedged El Salvador's dollarized economy from inflation.

Question 6

What is the state of crypto regulation in the US?

Accepted Answer

US lawmakers are working on a whole-of-government strategy for crypto legislation. Currently, the IRS treats crypto as property, so individuals pay income tax and capital gains tax on some transactions. Meanwhile, the SEC and the CFTC have radically different approaches, as they regard cryptocurrencies as securities and commodities.

Question 7

What is MiCA and how does it affect the EU crypto market?

Accepted Answer

The Markets in Crypto-Assets (MiCA) Regulation is a crypto bill aimed at strengthening consumer protection and licensing requirements across the European Union to establish the first bloc-wide regulatory framework. Provisionally approved in June 2022, it is expected to enter into force sometime in 2023.

Question 8

Why are regulators developing special laws for digital assets?

Accepted Answer

The laws regulating traditional finance (TradFi) cannot address the unique features, benefits, and risks of cryptocurrencies. As a result, treating crypto as property, securities, or commodities is controversial. Furthermore, the existing legislation is inapplicable to DeFi due to the absence of legal entities and formal management.

Anna Guseva , Leading Writer at CoinLoan

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