The initial offering of coins on blockchain platforms has colored the world red for technology startups around the world. A decentralized network that can assign tokens to users who support the idea with money is both revolutionary and rewarding.
It turned out that profitable bitcoin was a ‘property’ for early investors who gave multiple returns in 2017. Investors and cryptocurrency exchanges around the world took the opportunity and made huge returns for themselves, which led to an increase in numerous online exchanges. Other cryptocurrencies such as Ethereum, Ripple and other ICOs have promised even better results. (Ethereum has grown more than 88 times in 2017!)
While ICOs brought millions of dollars into the hands of startups within days, the governing governments initially decided to follow the fastest development of fintech ever that 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 wary as the technology and its underlying effects have become popular as ICOs have begun to think about billions of dollars in funds—— on proposed plans written in white papers.
Governments around the world took the opportunity to intervene in late 2017. While China completely banned cryptocurrencies, the SEC (Securities and Exchange Commission) in the US highlighted the risks posed by vulnerable investors and suggested treating them as securities.
A recent warning by SEC President Jay Clayton issued in December warned investors to mention,
“Also keep in mind that these markets span national borders and that significant trade can occur on systems and platforms outside the United States. Your invested funds can travel abroad quickly without your knowledge. As a result, risks may increase, including the risk that market regulators, such as the SEC, may not be able to effectively prosecute bad actors or recover funds. “
This was followed by concerns from India, where Finance Minister Arun Jaitley said in February that India does not recognize cryptocurrencies.
In a circular sent by the Central Bank of India to other banks on April 6, 2018, banks were asked to sever ties with companies and stock exchanges engaged in trade or transactions in cryptocurrencies.
In Britain, the FCA (Financial Conduct Authority) announced in March that it had formed a working group on cryptocurrencies and would take help from the Bank of England to regulate the cryptocurrency sector.
Different laws, tax structures in different countries
Cryptocurrencies are mostly coins or tokens launched on a cryptographic network and can be traded globally. While cryptocurrencies have more or less the same value around the world, countries with different laws and regulations may bring different returns for investors who could be nationals of different countries.
Different laws for investors from different countries would make calculating returns a tedious and cumbersome exercise.
This would involve investing time, resources and strategies that would cause unnecessary prolongation of the process.
Instead of many countries passing different laws for global cryptocurrencies, there should be a constitution of a single global regulatory body with laws that apply across borders. Such a move would play an important role in improving legal cryptocurrency trading around the world.
Organizations with global goals such as the ITA (United Nations), the World Trade Organization (WTO), the World Economic Forum (WEF), the International Trade Organization (ITO) already play an important role in uniting the world on different fronts.
Cryptocurrencies were formed with the basic idea of transferring funds around the world. They have more or less similar value on all stock exchanges, except for negligible arbitrage.
The global regulatory body that will regulate cryptocurrencies around the world is a need of the moment and could set global rules to regulate the latest way of financing ideas. Currently, every country is trying to regulate virtual currencies through laws, which are being drafted.
If economic superpowers with other countries can build consensus by introducing a regulatory body with laws that know no national borders, then it would be one of the biggest breakthroughs in designing a crypto-crypto-adapted world and encourage the use of one of the most transparent fintech. system ever – “blockchain.
A universal regulation consisting of parts relating to cryptocurrency trading, refunds, taxes, penalties, KYC procedures, exchange laws and penalties for illegal hacks can bring us the following advantages.
This can make calculating profits super easy for investors around the world, as there would be no difference in net profit due to the unique tax structure
Countries around the world can agree to share a certain portion of profits as taxes. Therefore, the share of countries in taxes collected would be uniform throughout the world.
The time involved in constituting a number of committees, drafting laws followed by debates in the legislative arena (such as the Parliament in India and the Senate in the US), could be saved.
One should not go through the strict tax laws of every country. Especially those involved in multinational trade.
Even companies offering tokens or ICOs would comply with the stated ‘international law’. Therefore, calculating income after tax would be an easy walk for companies
A global structure would require more companies coming up with better ideas, which would increase employment opportunities around the world.
The law may be supported by an international supervisory authority or global currency regulator, which may have the authority to blacklist an ICO bid that does not comply with the norms.
These are not all advantages, when it comes to the law that would regulate cryptocurrencies around the world. There are certain shortcomings also.
Bringing together world financial leaders to come together and draft a law could take time. Discussions and their consensus building can be challenging
Countries or economies that provide tax-free structures may not agree to accept a law that provides for a universal tax policy
Involvement of a global supervisor or regulatory body in monitoring regulatory developments in relation to ICOs may not go well in some countries
Universal law can lead to the world being divided into factions. Countries that do not support cryptocurrencies like China may not be part of it.
Law can be the idea of economically strong nations that could design it to suit their best interests.
This law would be centralized with a global regulatory body as opposed to cryptocurrencies which are decentralized by nature.
The world was better together. Whether it’s creating a peaceful world after World War II, or uniting 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 would define the economic prosperity of the world. They would help develop global standards for cryptocurrencies and could be part of a regulatory body that would guide and beacon to thousands of ICOs around the world for the better. At first this may take time, but it would make things easier for the time to come.