Cryptocurrency regulations in the world in 2021

Today the increase in the use of cryptocurrencies and tokens for financial exchange is increasingly evident. And it is that in recent years the world has been preparing to adopt these digital assets more seriously.

bitcoin coin with a Judge's hammer

In different countries, new laws get proposed to promote the prevention of money laundering. Because this is one of the direct consequences of using crypto-assets is the encryption of the data of those involved. Indeed, the regulation of cryptocurrencies is necessary to prevent money laundering and contribute to global economic growth. So, this article discusses cryptocurrencies, possible experiences, and rules and regulations in today’s world. But before we delve into that, let us quickly have a run through some fundamentals about cryptocurrencies.

What is Cryptocurrency?

Decentralized digital currencies developed on a blockchain network using advanced encryption methods such as cryptography are cryptocurrencies.

Cryptocurrencies are digital currencies because they only exist on the internet, unlike the real, the dollar, and other touchable currencies. In other words, you know they are real, but you cannot catch them with your hands – or keep them in your wallet, safe, or under your mattress.

Network blockchain is the technology behind cryptocurrencies. Blockchain is a system that allows sending and receiving some types of information over the internet. These are pieces of code generated online that carry related information, like blocks of data that form a chain – hence the name “blockchain.”

And in encryption systems, this layer of security, guaranteed by the blockchain, allows the issuance and transaction of virtual currencies more securely – when done correctly. It is also from this technology that the name cryptocurrency comes from – Encrypted Currency.

How profitable is Cryptocurrency?

Countless billionaires had made their fortunes in cryptocurrencies by the year 2021. These Bitcoin Billionaires made their money by investing early and reaping the rewards. Bitcoin seemed like a possible disaster at the time, but since the start of 2021, it has become one of the most sought-after investments by investors everywhere. At the time, there was only one Cryptocurrency on the market: Bitcoin. Today, there are other cryptocurrencies to choose from in the available pool. What is different now? It is incredible how much power and the potential it has.

In March of 2020, the U.S. economy suffered a knock, and investors went into a panic, selling off most of their hazardous assets. As a result, Bitcoin’s value dropped by 50% in a single day, impacting the entire cryptocurrency market. Bitcoin’s price touched an all-time high of US$60,000 in 2021, with a total cryptocurrency market size of US$1.5 trillion. The market cap had dropped in the previous year. Various institutions and corporate executives have recognized cryptocurrencies’ potential since then. These crypto billionaires are living proof that the crypto environment is constantly changing.

Reasons why the cryptocurrency market is currently booming

Although the cryptocurrency market has been volatile, despite COVID-19 disrupting significant economies worldwide, the market is recovering well. Several crypto and blockchain startups arose to meet the soaring demand for Bitcoin and other cryptocurrencies as companies dealt with the effects of the pandemic. Numerous cryptocurrency trading platforms have popped up worldwide, and many of these companies successfully raised large sums of money from investors to expand their market share.

The cryptocurrency market boomed due to the rise of Bitcoin, the world’s most valuable crypto coin with a market cap of over $1 trillion. Recently, Bitcoin has been on the rise, accounting for 69% of the total market value. When the crypto market crashed, Bitcoin prices plummeted, and now it is finally regaining some of those losses. At the beginning of 2021, Bitcoin hit an all-time high of US$60,000.

How, then, did the market manage to correct itself so well this time around? To sum it up, here are five reasons for the expansion.

Many financial institutions give the all-clear

Bitcoin is now accepted by major institutions all over the world, despite its speculative past. Although the crypto coin fluctuates a lot, it is a safe investment, paving the way for other cryptocurrencies to gain a good reputation. Numerous publicly traded companies have recently converted their cash treasuries into cryptocurrencies by purchasing Bitcoins. Examples include Square, a U.S. payment processing company, and Microstrategy, a publicly traded U.S. software company.

Exchange of cryptocurrencies via PayPal

There are roughly 350 million people who use PayPal. By 2020, Paypal plans to introduce a new feature that will allow millions of users to buy and sell cryptocurrencies directly through the platform themselves. You could trade various crypto-coins for traditional currencies like U.S. dollars, British pounds, and euros. Considering Paypal was one of the initial opponents of cryptocurrencies. It is huge news for the cryptocurrency industry. A similar feature was launched by Venmo after Paypal’s launch, allowing its users to send crypto payments.

The concept of scarcity

Even Bitcoin and other cryptocurrencies have a finite supply. However, the halving of Bitcoin’s supply adds a significant boost to its value. Due to scarcity, a scarce commodity is worth more than other comparable ones. Because of mining, the Bitcoin network can add new coins. Bitcoin miners conduct this process to ensure that blocks of the digital currency are authentic. One block of transactions is verified and added to the Bitcoin network every ten minutes by a miner to earn rewards. Once done, traders get rewarded with 6.25 BTC per block, and this reward gets halved every four years or when 210000 blocks get mined, whichever comes first. The halving of Bitcoin rewards means cutting them in half. There are only 21 million Bitcoins created, so a decrease in compensation will result in fewer coins being available on the market, increasing demand for the currency due to scarcity. As a result, the value of other cryptocurrencies is also affected.

Ease of Access

When Cryptocurrency first came out, the plan was for it to become only a payment method. But it is now also a way to store wealth. Even though many people are reluctant to use cryptocurrencies as a payment method, they are willing to invest in them as an asset. Despite the RBI’s anti-crypto policies in countries like India, investors are still buying and holding Cryptocurrency. The number of platforms offering crypto as an asset has also increased dramatically.

Countries' acceptance

Many governments are getting on board with forming crypto regulations as private investors and institutions adopt cryptocurrencies as payment methods. Several countries have adopted a pro-cryptocurrency policy. An example is El Salvador which is the first country to make legal tender of Bitcoin.

What are the ways of profiting from the cryptocurrency economic boom while it lasts?

In the present day, the entire world is a passenger on the cryptocurrency ship. And many success stories have prompted investors to invest in Cryptocurrency. And they do this even in the face of all the flurry of daily activities. Of course, there are also debates about this marketing hype. Even though investors, banks, and next-generation millennials actively leverage Cryptocurrency’s advantages, it is still a work in progress.

However, if you are still perplexed and puzzled about how to invest in cryptocurrencies? Or do you want to know if it is a good idea to put money into a cryptocurrency portfolio? Or if you stand a chance to make money with Cryptocurrency? Or what is the best way to get started? And what is the best Cryptocurrency to invest in right now? If you have any of these concerns, you should continue reading this guide before making any investments.

Know that the cryptocurrency market has a high degree of volatility

The cryptocurrency market is highly volatile, much like the stock market. If you have not heard, Cryptocurrency has had a solid start to the year. However, due to China’s ban on cryptocurrency trading, the crypto market has taken a beating recently. Do not let it be new to you that risks are always present in the market, even with the best cryptos.

Make use of diversification in your dealings

Putting all your eggs in a basket is one of the fatal moves a trader can ever make in the financial market. And the volatilities of the cryptocurrency market have necessitated diversifying your assets investments portfolios. Investing in multiple crypto stocks gives you peace of mind knowing that you will not be hit with any losses if one fails.

Bitcoin and Ethereum are good options to start investing because they only require a small amount of money. They have the highest percentage usage by traders as compared to other cryptos. And considering Bitcoin’s value and Etheruem’s blockchain functionality, it is an excellent investment.

Know the value of a market

In addition to Bitcoin and Ethereum, other cryptocurrencies should get considered as well. However, there are many promising cryptocurrencies on the market increasing in value at a rapid rate. However, you cannot just look at the price history and purchase based on that information.

In addition, you must know how much money a coin is worth on the open market. Because some coins are more affordable, you will buy many of them as a beginner, wrongly believing that the price will rise to Bitcoin.

However, due to the unlimited circulation of coins, the coin market cap needs to be higher than that of Bitcoin. Finding out the current market value of a currency can give you a rough idea of how well it will perform in the future.

Select a Reliable Cryptocurrency Exchange

You will need a trading platform if you want to get into Cryptocurrency Investing. With a Crypto Exchange, investing in cryptocurrencies will be easier. Many crypto exchange platforms are available for trading. Some qualities you must look for to avoid scamming exchange platforms are high liquidity, a wide range of crypto assets, strong security measures, and a solid reputation. Determining this will require a great deal of research online.

Beware of fraudulent Cryptocurrency activities

Do not waste your time and money thinking that investing in cryptocurrencies is rewarding and safe at the same time. It is not 100% secure. Hackers and cybercriminals have begun to use cryptocurrencies in dubious ways to make money. And they majorly engage in cybercrime such as money laundering and phishing.

Be on the lookout always; you may incur significant losses if your digital currencies get stolen due to a security breach. Remember that fake digital currencies, on the other hand, can be used to commit crimes that are difficult to control or track.

Employ a tested and proven strategy to invest with your Cryptocurrency

A new investor in cryptocurrencies may wonder whether there is a specific strategy to follow since they have never invested before. The most well-known strategy for anyone trading cryptocurrencies is the dollar-cost averaging strategy, which experts recommend. Periodically buy a set amount of your chosen cryptocurrencies to minimize your exposure to volatility. You can make it a weekly, monthly, or quarterly pattern.

And you can also engage in long-term dealings via the “buy and hold” or “buying on the dip” techniques. You also need to continuously learn about the market and the cryptocurrency world at large to help you formulate a potent strategy that you can put to good use when investing. There are two sides to every coin.

The unpredictability of the future makes it difficult to determine the relevance of a cryptocurrency. Even so, if you are interested in investing in cryptocurrencies, you can certainly do so. If you are unsure whether you are ready, spend some time learning more before making a purchase.

Ensure fulfilling all regulatory conditions

The use of cryptocurrencies has increased in recent years in countries of all income levels. However, regulators worldwide are still figuring out how to deal with the brand-new problems presented by digital currencies. As a result, the regulations get regularly updated.

So, it will be best always to keep yourself abreast of any new law in your region of operations. It will spare you from any unnecessary fine or loss.

What are the key factors driving interest in cryptocurrencies?

  • Volatility and devaluation of local fiat currencies versus other global currencies resulted from central bank policies, inflation, and macroeconomic instability before and especially during the COVID-19 pandemic. Consequently, people and companies like Microstrategy and Tesla have bitcoin and other digital currencies in their holdings. As a result, users and legislators from the United States to El Salvador are developing new regulations for cryptocurrencies.
  • In Sub-Saharan Africa, remittance charges for traditional payment systems are about 9%, which could explain the rise in peer-to-peer bitcoin transactions.
  • Stablecoins as frictionless exchange mediums between cryptocurrencies and fiat currencies have been invented and rapidly scaled up. With a compound annual growth rate increasing, USD Coin’s market cap has surpassed $25 billion. Sweden has even been encouraged by the popularity of cryptocurrencies and central bank digital currencies to change its planned e-krona to compete (CBDCs).

As a result of this development, more people are turning to DeFi applications. Hence, new crypto ideas get quickly disseminated and attain full maturity due to the support from the open-source architecture and global developer communities.

Cryptocurrency regulations in the world in 2021

Cryptocurrency is not new and has been around for a while. To make matters more significant, 2020 will be a landmark year in terms of its widespread adoption. 2021 witnessed a big push because countries worldwide have begun to accept bitcoin in some way. In a bid to regulate cryptocurrency exchanges, several nations have also started developing national rules.

Disappointedly, International cryptocurrency rules did not yet get implemented. However, given the rapidly changing crypto scene, it appears likely that we will see it soon. Today, we will learn about Cryptocurrency and the various regulations enacted by different countries and regions around the globe.


Although the European Union has not made any specific legislation, it has been working on regulations that promote the prevention of money laundering. A proposal called MiCA (markets in crypto-assets) is known as the draft of cryptocurrency regulation. This regulation encourages the development and advancement of cryptocurrencies within a framework of legal security that protects users in their transactions.

In this way, companies or people who provide cryptocurrency services will have an obligation to comply with different requirements, such as having a tax domicile in one of the Member States and defining consumer protection rules in case of loss or scams using their exchange platforms. Although other countries have already approved this type of proposal, Europe’s is different because it is a general EU legislation that must be applied and complemented by each country. So this opens the possibility of having a general regulation of cryptocurrencies in a large area of ​​territory, giving each country the chance to experiment and legislate according to specific needs.


The French Ministry of Finance promotes the creation of new measures so that companies that make life around Bitcoin and other cryptocurrencies can effectively control their transactions. For this, they propose to prohibit anonymous cryptocurrency accounts by applying digital identification tools on exchange platforms.


The first regulation in Spain in Royal Decree-Law 7/2021 will be better expanded when the European Regulation is approved. This decree specifies who these laws will affect and where they must become registered in the Banco de España registry. It can guarantee that Exchange companies, wallets, and other digital services become registered to pay taxes and provide their services in Spain.

United Kingdom

Recently, in the United Kingdom, lawmakers demanded greater surveillance and regulation of cryptocurrencies in the territory. It is an initiative of the U.K. Treasury Committee initiative where the concerned government sector explicitly explored the benefits and risks inherent in using crypto assets. The committee then concluded that cryptocurrencies do not have an intrinsic value and are vulnerable to manipulation, so their regulation in the country will start from stable coins. The Bank of England and the Treasury Department evaluate adding this type of Cryptocurrency to their daily transactions.

To include cryptocurrencies in their everyday transactions, the bank drafts rules that regulate financial technologies. However, the lack of a legal framework has not prevented reducing the use of Cryptocurrency in the country. But instead, they have managed to show the present risks, and users are more cautious. Currently, British citizens are waiting for the official regulation of cryptocurrencies in their country, but they do not stop exchanging financial assets through the network.

Central America

A few months ago, the Salvadoran Parliament legalized the circulation of Bitcoins as currency. It means that every economic agent that carries out commercial transactions in the country must accept Bitcoins as a form of payment. With this, the government is committed to creating the structural and legal security that users need to exchange, buy and sell Cryptocurrency in the country. This step is a milestone as no country in the world has declared any crypto asset as legal tender. Japan has only managed to configure it as a payment method but not as a legal currency capable of being accepted in public entities despite being an advanced country that favors the field of cryptocurrencies.


In Mexico, the situation is different; thanks to the impulse of El Salvador, the acceptance of crypto assets seems at least to be in the discussion. Representatives of the Ministry of Finance and Public Credit, the National Banking and Securities Commission, and Banco de México have communicated their digital assets and risks. Therefore, they maintain that no financial institution based in the country is authorized to transact with cryptocurrencies. The still mistrust is due to the increase in the use of cryptocurrencies by drug cartels in Central America, which is why money laundering has also increased.


Recently, the Securities and Exchange Commission president, Gary Gensler, stated that his institution has the tools to regulate cryptocurrencies. His idea also goes towards the protection of platform users who trade securities and loan products. Cryptocurrency pools and wallets work in the United States only on platforms with a fiscal address in the country. And it is expected that in the future, some tokens will have attributes that are more in line with the Securities so that their legalization and the legal framework where they got developed could have more security within public policies.

Latin America: Brazil

In the case of Latin America, Brazil does not consider cryptocurrencies within its regulatory framework, although citizens must declare them in taxes. The possession of crypto assets must become reported as other assets in the Assets and Rights File of the income tax declaration. It means that they are financial assets. So it contributes as a good, and the government must collect capital tax on it.

On the other hand, the lack of specific regulations cannot prevent institutions such as the Real Estate Securities Commission from approving Ether (ETH) -quoted funds. Also, for some years in Brazil, applications have been created that allow the exchange of Tether (USDT). So the progressive use of this type of crypto will indeed incentivize a bill to regulate them. The federal deputy Expedito Neto recently submitted a request in the Chamber of Deputies to regulate cryptocurrencies based on Bill 2303/2015. So discussions are expected to begin in the coming months.


In the case of Venezuela, there is a relatively advanced legal framework for cryptocurrencies and associated services. By law, different regulations were put in place, such as SUNACRIP as the control entity of cryptocurrencies in the country and RISEC as a digital registration system. In addition, the government also established the regulations of the so-called Digital Mining Pool. All miners who carry out their activities in the country must be registered to use blockchain technology to favor their interests. These regulations cover all cryptocurrencies such as Bitcoin, Dash, Etherium, Petros, and others. However, rules with other crypto assets have not yet gotten proposed.


The regulation of cryptocurrencies in the Asian continent is very diverse. It is due to, in the case of China, the National Internet Finance Association clarifies that services that involve cryptocurrencies cannot get offered. It means that no bank or payment channel can offer cryptocurrency transactions in the country.

In the case of Korea, the Financial Services Commission takes another step towards monitoring digital businesses. The regulations ensure that the economic sector can guarantee the implementation of measures against money laundering. Together with the Ministry of Finance, the Fair Trade Commission, and the National Tax Services, each commercial industry will be in charge of supervising these measures and ensuring the registration of exchange companies, wallets, or others in the Korea Financial Intelligence Unit. It entails a series of requirements in which they must verify that the bottom of the platforms has real metallic support within a Korean bank.


The demand for cryptocurrencies in countries such as Nigeria has never been higher on the African continent. Despite this, the need for Cryptocurrency does not stem from a government shift toward cryptocurrencies. In recent months, the country’s central bank, the CBN, issued a statement prohibiting commercial banks from providing services to cryptocurrency exchanges.

Even the country’s SEC upheld the suspension of cryptocurrency regulatory plans. It indicated that it was working with the CBN to create an optimal regulatory regime for the sector in the country. It has increased the popularity of bitcoin adoption. The CBN and the Securities and Exchange Commission of the African country have now announced plans to make all crypto assets default assets. Regionally,

South African regulators have proposed stringent license requirements and supervisory requirements that do not recognize cryptocurrencies as legal tender.

Will cryptocurrencies continue to have a more widespread use despite the regulations?

A year ago, there were less than 600 cryptocurrencies valued at 12 billion dollars. They are decentralized digital reading currencies that use specific encryption and registration techniques called the blockchain. Tokens can be traded between two people without external approval because of their unique I.D.s and access rights. Blockchain protocols capture more wealth and value than earlier protocols (e.g., HTTP of a web page). Blockchain protocols are “thick” due to data connection and cryptographic “access” tokens.

These tokens serve as a means of joining a network or employed in investing. Like social networks, these tokens allow users to pick their level of involvement. They also allow for more equitable wealth distribution. It will not be surprising to see Blockchain applications gain value as the industry evolves. It is because the data link layer must permanently preserve value.

Cryptocurrencies are now much more viable after four years of infrastructure building. Major financial institutions are exploring the blockchain, and Ethereum, the blockchain-based Smart contract platform, is extending corporate support as its tokens have risen in value.

Factors favoring widespread use of cryptocurrencies:

  1. Purchases and sales of cryptocurrencies are now more accessible, simple, and widespread. In 2017, cryptocurrency exchanges saw a massive surge in users and transactions. Around 160 cryptocurrency exchange platforms and 1,326 Bitcoin ATMs sprang up. Traders swap cryptocurrencies for other digital or fiat currencies such as USD or EUR using it. Bitcoin ATM network Coinsource installs two to three each week at convenience stores. However, like Coinbase, certain exchanges stand out by offering a modern and simple user interface for bitcoin investors. In addition, several Bitcoin debit cards are now available for use anywhere, just like credit cards.
  2. Initial Coin Offerings (ICOs) allow entrepreneurs to raise funds by selling their virtual currency. The popularity of Cryptocurrency and its assets led to eight of the top ten most popular crowdfunding projects. 89 ICOs raised $1.1 billion in 2017, ten times in 2016 when 110 new ICOs got scheduled. Investors can reserve products or services before they are released to the public and share profits if the offering is successful and the token is valued. As a result of the SEC’s finding that some ICOs constitute securities, the worldwide bitcoin market fell.
  3. Cryptocurrency remittance companies now serve individuals and businesses globally. Excessive fees and extended settling times have long hampered remittances. These services provide safe and low-cost peer-to-peer money transactions while promoting the interoperability of the global money system. Individuals send and receive money via remittances globally. Therefore this system might potentially reach millions of people using blockchain and cryptocurrencies. Ripple has announced a $250 million annual remittance partnership with Siam Commercial Bank and SBI of Japan. Bitpesa in Africa, Bitspark and Everex in Asia, and others have sprung up.
  4. Cryptocurrencies exchange platforms help merchants and buyers buy Cryptocurrency by searching for $10-billion companies ready to take Bitcoins. Many other companies adopted this method, including Dell, Microsoft, and others. Merchants can lower transaction fees, reduce fraud, pay quickly, and issue refunds with bitcoin.

Regulation and flagging agencies are under increasing pressure to provide more information on the whereabouts of digital currencies as the market for them expands in popularity. When it comes to cryptocurrencies, uncertainty regarding their legal, tax, and financial standing can cause adoption to stall or lead to wild speculation.

To help with the development of effective crypto regulation, consider the following three lessons:

Pay attention to the fundamental factors that influence the adoption of cryptocurrencies

For years, most of the supreme financial regulatory bodies worldwide, also known as the central banks, have focused their activities on risk reporting and containment policies for virtual assets. As of 2019, global adoption increased enormously, and it did not reduce in the last year. The cryptocurrency bitcoin, for example, has grown from a small internet community to a well-known asset for investors, private companies, and even nation-states throughout this period. The actual trends differ significantly by region and are very telling. When it comes to financing, the developed world sees more centralization and decentralization. In contrast, emerging markets like Kenya, Tanzania, and Vietnam see more peer-to-peer (P2P) platforms.

Many new users turn to Cryptocurrency to protect their savings, send and receive remittances, and conduct business with currency values falling. Such transactions have increased even though central banks in Nigeria have banned bank-to-bank access while threatening the same in countries like India.

Study the significance of cryptography from a technological standpoint and the various applications it may have

It is challenging to apply present legal frameworks and rules ex-ante because of the immense potential of bitcoin uses, much like early internet protocols were challenging to adopt. In this context, hasty regulation is likely to pick winners and favor incumbents, intentionally or unintentionally. Even worse, it could widen the digital divide both within countries and across borders.

Using cryptocurrency networks, you can securely transmit, store, and access data and value over the internet in a new paradigm. Residents of Hong Kong have discovered that Arweave provides safe, immutable storage that is resistant to single points of failure and censorship. People unemployed or underemployed in the Philippines can turn to innovative new NFT gaming platforms like Axie Infinity, now worth over $1 billion. Digital rights and capabilities are being embedded in tokens in a revolutionary way by new software applications across sectors such as Defi, digital art and gaming (NFTs), and non-legal entity formation (decentralized autonomous organizations or DAOs).

Regulators must distinguish between centralized and decentralized risks to fully support the development of this new Paradigm. Consumer protection, privacy bureaus, and tax authorities worldwide are familiar with cryptocurrencies’ financial threat for centralized exchanges and customized financial services. Cryptocurrency exchanges and custodial financial services are not.

Cryptocurrency systems are anonymous and have no geographical boundaries, which regulators have highlighted as mitigating against combating money laundering and terrorism financing. However, compared to the traditional financial system, illicit activity in the cryptocurrency world is a tiny fraction of total transactions (0.34%).

Cryptocurrency auditing makes it easy to keep track of transactions in real-time, retain records, and mitigate risks. Detecting and preventing money laundering helps build the case for criminal prosecutions. When viewed in this light, cryptocurrencies can enable greater transparency and give regulators a way to encourage more transactions to move from the informal to the formal sector.

Promote global governance that is more representative of all people

Regulators now have the opportunity to take advantage of new regulatory arbitrage opportunities while also creating market insecurity. The absence of genuinely inclusive policy platforms is a crucial lever for global harmonization. Financial exclusion gets exacerbated in Latin America, the Caribbean, and sub-Saharan Africa due to the implementation of derisking regulations established to curb criminal activities.

Because they are not members of organizations like the Bank for International Settlements (BIS) or Financial Action Task Force (FATF), developing countries in these regions bear a disproportionate share of the costs of financial rule-making. Unbanked and underbanked people living in these countries have benefited from this disparity. And it has boosted the popularity of cryptocurrencies.

Regulators face a significant challenge because open-source cryptocurrency networks like Bitcoin and Ethereum use computer protocols found easily on the internet. Tokens, self-hosted wallets, and other services can all be issued directly through these permissionless interfaces, eliminating the need for a third-party intermediary.

If cryptocurrencies are made illegal, regulators will have less capacity to direct market activity and handle specific concerns on these networks. In the long run, real-world use cases and conversations with technology entrepreneurs will help strengthen laws and reaffirm critical policy objectives that encourage economic inclusion, competitiveness, and growth.


The merits and demerits of cryptocurrencies have divided governments worldwide on how best to regulate this new asset class. Because crypto transitions from speculative investment to a balanced portfolio stablemate. The onus is, therefore, on the traders or investors to research local regulations and adopt them.

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