As India looks to rein in crypto, here's a look at how they're regulated across the world

The Reserve Bank of India issued a circular in 2018 banning banks and NBFCs from dealing in virtual currencies and providing services for “facilitating any person or entity in dealing with or settling virtual currencies.”

In a relief to investors, the Supreme Court struck down the ban imposed by RBI, terming the circular as ‘unconstitutional’ as cryptocurrencies are not illegal in India.

The government has listed a bill that will be introduced in the parliament session that aims at prohibiting all ‘private’ cryptocurrencies, barring a few ‘exceptions’. This is the second time the bill has been listed.

The Indian government had earlier put in on the agenda of the Budget Session of Parliament in February, but it didn’t make the cut to come up for discussion.

The Reserve Bank of India is looking to introduce a digital currency that will be regulated by the central bank. Across the world, 83 countries, including Japan, China, and Russia are already working on implementing their own digital currencies.

While the United States does not consider cryptocurrencies as a legal tender, exchanges are required to obtain a license to operate. The Internal Revenue Service (IRS) has classified cryptocurrencies as an asset for tax purposes. A recently passed infrastructure bill includes a provision for taxing crypto trades, however, the provision has attracted criticism for being vague.

China has banned crypto exchanges from operating in the country and has also imposed a ban on crypto mining. The country is currently working on a government regulated Digital Yuan to replace existing cryptos.

Russia has allowed crypto exchanges to operate in the country and investors can mine, hold and trade cryptos. However, they cannot use cryptos for payments. The government is also looking to create its own regulated digital currency.

Crypto exchanges in South Korea require a license to operate and investors are free to invest and trade in crypto. The country is working on a tax code that seeks to levy 20% tax on income earned from crypto transactions over 2.5 million Korean won (₹1,56,600 approx.).

Japan recognises cryptocurrencies as legal property under the country’s Payment Services Act and exchanges are required to obtain a license to operate. The income from cryptos is classified as “miscellaneous income” and taxed accordingly.

While crypto regulations vary across different members of the union, virtual currencies are widely considered legal across the European Union. The Markets in Crypto-Assets Regulation was proposed in September which intends to regulate the crypto industry and propose licensing requirements.

Australia has classified cryptos as legal property and exchanges are allowed to freely operate after registering with the Australian Transaction Reports and Analysis Centre. Crypto gains are classified as capital gains and taxed accordingly.