You want to invest some money in cryptocurrencies because you think you like what they stand for and how they are about revolutionizing how the financial system around the world works. However, you constantly hear news about the work of the regulation of this industry. Of course, there is no one worldwide book of rules to regulate and govern the use, transmission, sale, and purchase of cryptocurrencies, and that makes their regulation a complicated issue for new investors.
Here is some basic information you should have about cryptocurrency regulation. After that, you will get to know how you can invest in them without putting yourself in trouble.
Regulation of Cryptocurrencies around the World
It’s quite astonishing how the legality of cryptocurrencies changes from one developed nation to another. You would think that all developed countries would have the same instance on them, but that’s not the case at all. The worst place for cryptocurrency investors and traders is China where digital currencies and their trades are considered illegal. Similarly, if you are in India, you would rather want to get rid of crypto than hold it because every transaction that involves digital coins can be taxed as much as 30% of the transaction.
The US is somewhere in the middle when it comes to regulating and legalizing cryptocurrencies. The country is still compiling various laws and regulations to regulate this industry. However, as of now, you can’t use it as legal tender, but you can use online cryptocurrency exchanges to store your digital coins. The same rules apply in Canada. You would say that most of the West is on the same page about digital currencies as the UK’s current treatment of the industry is similar to that of the US.
Australia and Japan, on the other hand, are completely on the other side of the spectrum. If you live in any of these countries, you can use store it as a part of your wealth, and using exchanges is not a problem. Things are even better for people living in Switzerland as they can use it for buying their daily items as well. You could say that India and China stand as the countries with the strictest action against the cryptocurrency community.
How You Can Invest in Cryptocurrencies
The first thing you should know is that regulation is not something against you, even though any news about regulation does cause the market to slip. There are many entities that want to take advantage of the anonymous nature of cryptocurrency transactions. They want to use it for money laundering and other illegal means. Furthermore, various companies, newly launched cryptocurrencies, and crypto exchanges might defraud you and deprive you of your money without being answerable to anyone.
The coming of regulation will ensure that all your interests are protected. The first thing that regulation does is that it requires these entities to register with and get authorized by a financial conduct authority of the country before providing their services.
You can always use other methods to invest in cryptocurrencies. For example, you can go with crypto brokers that might give you the option to invest in them without owning them. However, it does make sense that you research the broker thoroughly before you open an account with it. The first step for you should be to read crypto broker reviews to know they are legitimate.
If you are in doubt about their legality, you should not sign up at all. Look for regulations, registration, and reviews before you finalize your decision about trading with a broker.
Now, before you start investing, it makes sense that you know about the regulation of cryptocurrencies in your country. Most countries have no problem with you using online brokers and exchanges for buying and selling crypto. You can always use hot wallets to keep your money online, which actually means that you don’t have it directly in your possession but in the wallet that belongs to the exchange you are using or trading.