Compendium – Cryptocurrency regulations by country Cry Author Todd Ehret and Susannah Hammond

Compendium – Cryptocurrency regulations by country 
Cryptocurrency regulations by country
June 1, 2021
By Todd Ehret and Susannah Hammond, Regulatory Intelligence

The public appetite and enthusiasm for cryptocurrencies such 
as bitcoin have exploded in recent years. First introduced in 
2008 as an alternative and disruptive technology to traditional 
banking and payments, bitcoin and other digital currencies 
or digital assets were met with skepticism and caution 
as they were not understood. Their anonymity also made 
cryptocurrencies susceptible to misuse in illicit activities. 
Much has changed in recent years, as the number of users 
has exploded, and some established financial services 
firms have also begun to test the crypto waters. Prices 
have rocketed despite incredible volatility, and financial 
regulators and regulations have struggled to keep pace.
The regulatory regime surrounding cryptocurrencies is 
fragmented and stretches to the extremes of outright bans 
in some jurisdictions, to some countries that are advocates. 
Complete restrictions are somewhat rare and difficult to enforce, 
with crypto markets regularly shrugging off news of restrictions 
in some jurisdictions, but regulators are scrambling to clarify 
rules and keep pace with crypto’s exploding popularity.
The regulatory overlay related to digital assets such as bitcoin 
and other cryptocurrencies in its infancy, and the challenge of 
building a regulatory framework often is complex and uncertain. 

Many market participants insist on a more established 
regulatory regime and certainty, which likely means new 
rules, regulations, or at a minimum official guidance. The 
race to create such a regulatory regime is now underway.
Crypto-assets, cryptocurrencies, central bank digital 
currencies and non-fungible tokens make up the new “crypto” 
universe, and each provides unique benefits, challenges, 
and complexities. This annex provides a country-by-country 
summary of the cryptocurrency regulatory picture. The list 
below focuses on cryptocurrencies such as bitcoin. It provides 
an overview for each country, the regulatory state of play 
and links to the primary financial regulatory authorities or 
relevant documents. Much of the regulatory framework is still 
developing, and regulations and restrictions also vary greatly 
depending on uses such as payments, investments, derivatives, 
and tax status. Most countries have generally found ways to tax 
gains or income derived from cryptocurrencies, and some have 
more specific obligations than others. Few pure “tax havens” 
remain.
Regulatory Intelligence may delve deeper into other aspects 
of cryptos such as non-fungible tokens and digital central 
bank currencies in future articles or special reports.

North America
Canada – Canada has been an early adopter and is seen 
as quite “crypto-friendly” with several approvals of bitcoin 
exchange-traded funds (ETFs). Canadian Securities 
Administrators (CSA) and the Investment Industry Regulatory 
Organization of Canada (IIROC) have issued guidance requiring 
crypto trading platforms and dealers in Canada to register with 
the local provincial regulators. Firms dealing with cryptos are 
considered money service businesses (MSBs) and must also 
register with the Financial Transactions and Reports Analysis 
Centre of Canada (FINTRAC). The requirements also apply to 
foreign-based firms if they have Canadian customers. 
The Canada Revenue Authority (CRA) generally treats 
cryptocurrency like a commodity for purposes of the Income Tax 
Act.
Mexico – Mexico has embraced cryptocurrencies and is seen 
as a very crypto-friendly jurisdiction. The Mexican government 
and the financial authority, CNBV enacted a new set of fintech 
laws in March 2018. Its largest crypto exchange, Bitsos, has 
more than 1 million users on its platform.
Mexico’s Federal AML Law was amended in March 2018 to 
include transactions with “virtual assets”.

Mexico’s tax framework for cryptocurrencies is expected to 
change as there is no official position. Most see cryptos as 
intangible assets where gains would be taxed at 30% for 
corporations and anywhere from 2% to 35% for individuals.
United States – The regulatory framework for 
cryptocurrencies is evolving despite overlap and differences 
in viewpoints between agencies. Although the Securities and 
Exchange Commission is widely seen as the most powerful 
regulator, Treasury’s FinCEN, the Federal Reserve Board, and 
the CFTC have issued their own differing interpretations and 
guidance. The SEC often views cryptos as securities, the CFTC 
calls bitcoin a commodity, and Treasury calls it a currency. The 
Internal Revenue Service (IRS) defines cryptocurrencies as “a 
digital representation of value that functions as a medium of 
exchange, a unit of account, and/or a store of value” and has 
issued tax guidance accordingly.
Despite the muddied regulatory framework, the United States 
is seen as home to the largest number of crypto investors, 
exchanges, trading platforms, crypto mining firms and 
investment funds.

Central and South America
Argentina – In Argentina, investing in cryptocurrencies is 
legal but they are not considered legal currency or tender 
as they are not issued by the government. Although there 
are no regulations, profits are taxable. Legislation has 
been proposed to create a national legal and regulatory 
framework for crypto-assets as a means of payments, 
investments, and transactions.
The Argentina Securities and Exchange Commission (CNV)
will be the regulatory body with oversight responsibilities 
and plans to maintain a national registry of operations with 
transactions reported to the Financial Information Unit (FIU) 
for compliance with anti-money laundering requirements.
Argentina’s Federal Administration of Public Income (AFIP) 
and central bank have requested more information from 
domestic crypto exchanges and banks. Gains from cryptos 
are generally taxable at a 4% to 6.5% rate on gross income 
for each digital currency transaction.
Bolivia – The Bolivian government banned the use of 
cryptocurrencies such as bitcoin in 2014, in the belief that 
it would facilitate tax evasion and monetary instability. 
“It is illegal to use any kind of currency that is not issued 
and controlled by a government or an authorized entity,” 
Bolivia’s central bank (BCB) said. 
Brazil – Cryptocurrencies in Brazil are largely unregulated. 
Legislators have, however, begun to propose a series of 
regulations that might fill the void if enacted. The Brazilian 
Securities and Exchange Commission, or CVM has approved 
two crypto ETFs. The Brazilian government has declared 

that bitcoin is an asset and therefore is subject to capital 
gains taxes. Brazil has said that existing AML laws extend 
to virtual currencies in a few contexts.
The Special Department of Federal Revenue of Brazil has 
published a document on cryptocurrency taxes in the country.
Chile – The Chilean government has committed to develop 
a regulatory and oversight framework for cryptocurrencies 
and the growing number of cryptocurrency exchanges in the 
country. In the absence of a legal framework, the Central 
Bank and the Financial Market Commission has said that 
existing regulations are applicable to cryptocurrencies. 
The Chilean Internal Revenue Service (SII) is the 
only institution so far to have issued legislation on 
cryptocurrencies in Notice no 963, issued on May 14, 2018. 
The SII released a determination on the taxation of income 
obtained from buying and selling cryptocurrencies. It said 
that Tax Form 22 would require the declaration “from the 
sale of foreign currencies of legal course or assets digital/
virtual, such as cryptocurrencies (for example, bitcoins)”. 
Colombia – In Colombia there is no specific legislation 
regulating the use of cryptocurrencies. The Banco de 
la República, the country’s monetary, exchange and 
credit authority, and the Superintendencia Financiera 
de Colombia (SFC), the government agency responsible 
for overseeing financial regulation and market systems, 
released statements on cryptos warning they are not legal 
tender or valid investments for supervised entities, and 
firms are not authorized to advise or manage them

Compendium – Cryptocurrency regulations by country Cry Author Todd Ehret and Susannah Hammond