The global landscape of cryptocurrency regulation is a patchwork of diverse approaches, with some countries embracing the technology, others imposing restrictions, and still others outright banning it. JPMorgan Chase CEO Jamie Dimon has recently expressed strong opposition to Bitcoin, calling for its shutdown due to concerns about its use in illegal activities such as terrorism, drug trafficking, and ransomware attacks.
Despite such concerns, cryptocurrency is legal in 119 countries and four British Overseas Territories, with Europe leading in terms of recognition. El Salvador and the Central African Republic are the only countries that have adopted cryptocurrency as legal tender, although El Salvador is the only country actively using it. Meanwhile, 25 countries are considered 'crypto neutral' and have not assigned a definitive legal status to cryptocurrency usage. On the other hand, 22 countries have outright bans on cryptocurrency use and transactions. Despite bans, countries like China, Egypt, and others still have a significant number of cryptocurrency owners.
In the United States, the regulatory landscape is evolving. New Jersey has introduced a bill that would classify cryptocurrencies issued and sold to institutional investors as securities. At the federal level, lawmakers have proposed the Digital Asset Anti-Money Laundering Act, which aims to close loopholes in the nation's Anti-Money Laundering rules. The bill would designate a diverse range of digital asset providers as financial institutions and require them to comply with the same regulations as traditional banks. If passed, the legislation could have a significant impact on the crypto industry, potentially imposing burdensome requirements on validators and miners.
The need for regulation is underscored by research from MIT Sloan, which explores how retail investors behave in the crypto market and the lessons learned from the collapse of Terra Luna. The research highlights the need for consumer financial protection, the implications of a crypto crash on the broader economy, and the limitations of blockchain transparency.