Cryptocurrency is reaching new heights every day. The year 2021 saw surprising advancements in crypto and Blockchain.
Experts had already predicted how digital currencies will overtake the financial world. Little did we know that we can witness the transformation so quickly.
In 2021, Bitcoin broke its old record. For the very first time since its launch, Bitcoin embarked at a $68,000 level.
While NFTs also gained huge momentum. Moreover, Facebook’s rebranding and investment pushed the tech industries towards Metaverse.
With a lot happening around digital assets, countries worldwide can no longer ignore the presence of cryptocurrencies.
Several government agencies came up with laws and bills to monitor digital assets in their countries. Some countries welcomed the change while others like China put a complete ban on it.
We will take you through the groundbreaking events that occurred around digital assets in the year 2021.
How Do Countries Respond To Cryptocurrencies In 2021?
When cryptocurrencies started to become popular, the first response of countries was to ignore them. However, with the expansion of digital assets and blockchain technology in every sector, governments started to notice it.
It also came out to be the perfect opportunity for people to process their illegal affairs. News concerning money laundering, Tax invasion, Terror funding, and other illegal activities using crypto started to resurface.
It is the time when government regulatory bodies started to direct their focus towards the mechanism of cryptocurrencies.
Some governments like that of the U.S.A asked Fintech firms to report transactions exceeding a specific amount. FinCen also came up with several rules to monitor the companies dealing with digital assets.
The Bank of England has urged the use of stable coins in everyday life in a new paper on digital currencies.
However, the Bank of England has suggested that stable coins, like banks, be regulated if they are to be considered for everyday use.
The Indian government is looking to ban all cryptocurrencies. The RBI will be launching its own digital currency.
On the other hand, China, fearing a major economic fall has banned all activities related to cryptocurrency. ModiCoin is one such platform that offers easy and convenient ways for crypto investments.
Whatever be the reason, cryptocurrencies were always in the headlines in 2021. Here are the major government decisions on crypto across the globe.
El Salvador Adopted Bitcoin As Legal Tender
El Salvador’s president Nayib Bukele implemented Bitcoin Law on 7th September 2021. The government has decided to accept Bitcoin as legal tender along with Dollars in the country.
El Salvador marked a historic day by becoming the first country to legalise Bitcoin tenders. The bitcoin law was passed by a supermajority.
It earned 62 positive votes out of 84. The pensions and salaries will continue in US Dollars. Also, any payment in Bitcoins can be easily and immediately converted to US Dollars.
The reason behind such a decision is the remittances issue of El Salvador. 70% of the country’s workforce is working abroad. They have difficulty accessing traditional payment systems.
The Bitcoin law offers a simplified way of sending remittances back to the country. Remittances cover 20% of El Salvador’s GDP, which is the highest in the world.
However, according to the International Monetary Fund (IMF), this law raises many legal, financial, and macroeconomic concerns. If the Bitcoin law is to be implemented successfully, these issues must be thoroughly investigated.
In the country known as the Land of Volcanoes, the government has come up with an innovative idea. The government has decided to set up a Bitcoin mining plant that will be powered by the geothermal energy of the Volcanoes.
Uae All Set To Officially Accept Crypto
UAE is the second nation on the pro-crypto list. The UAE finance regulatory agencies are all set to officially support and aid the development of the crypto industry.
DFSA is Dubai Financial Authority had announced in January 2021, a framework for the cryptocurrency sector. The framework will possibly come into effect in 2022.
In its 2021 Business Plan paper, the agency said that it is open to business with innovations in the financial sector.
DFSA will plan rules that will regulate digital assets like crypto, utility tokens, NFTs, security tokens and others. The regulations will ensure a fair market for the development of crypto.
Among the several approved proposals, the country also showed a green signal to the Canadian Bitcoin Fund.
To support the digital assets, the nation on its 50th National day released a poster as NFT. Several free economic zones are being set up across Dubai where crypto trading and investments will be legal.
The Dubai World Trade Centre welcomed the government’s decision. The DWTC is looking forward to playing a major role in the development and regulation of crypto products.
DIFC launched Fintech Hive to support FinTech start-ups. To date, 300 companies are working from the DIFC hub.
DFSA supports the DIFC’s FinTech accelerator programme and works closely to guide it from time to time.
DFSA is still to introduce DLT and other technologies like data analytics to regulate the companies. The agency says it is exploring various methodologies for better regulatory oversight.
Canada Approved New Bitcoin ETF
Canada becomes the first country to approve the world’s first Bitcoin ETF. With this Canada surpasses all countries to rank on the top of the crypto-friendly nations.
The Ontario Securities Commission approved the Bitcoin Exchange Traded Fund for investment purposes.
The ETF will be the first in the world to invest directly in physically settled Bitcoin rather than derivatives, giving investors easy and efficient access to cryptocurrency’s emerging asset class.
This is not the first time that Canada is launching the crypto ETF. In the year 2020, Canadian regulators approved ETF style products developed by 3iQ.
It was listed on the Toronto Stock Exchange. Unlike the current Bitcoin EFT, it was a closed-end fund.
The Bitcoin ETF was launched by Purpose Investments. It is surprising how within the 5 days of the launch, the Bitcoin ETF already has $564 Million in assets.
More firms are coming up with crypto EFT products to fuel the Canadian EFT race. Fidelity Canada launched its Fidelity Advantage Bitcoin ETF and the eponymous mutual Bitcoin ETF fund.
Accelerate Financial Technologies is also launching Accelerate Bitcoin ETF (ABTC) on 2nd February. Another investment fund Arxnovum has also applied for the approval of its Bitcoin ETF with the OSC.
Singapore Becomes Crypto Hub
In 2021, Singapore remained one of the world’s most important hubs for cryptocurrency exchanges and blockchain businesses, thanks to the country’s policymakers’ efforts to promote the industry.
Fintonia Group, a company registered by the Monetary Authority of Singapore, established two new institutional-grade Bitcoin funds in Singapore in November (MAS).
Previously, MAS had authorised businesses such as Independent Reserve, an Australian crypto exchange, and DBS Vickers, a brokerage subsidiary of DBS Bank, to offer digital payment token services in the country.
DBS Bank, Singapore’s largest retail and commercial bank, is one of the most prominent local corporations to enter the cryptocurrency market in the last year.
After establishing its trading platform, DBS Digital Exchange saw a tenfold increase in volume in 2021.
According to a survey, 43% of the people in Singapore own crypto. ModiCoin brings to you reliable and safe investment opportunities.
A major factor in making Singapore a crypto hub is China’s complete ban on crypto. The companies operating from China are now moving to Singapore. As of July 2021, the authorities have received more than 300 Cryptocurrency License applications.
Gibraltar Becoming A Popular Crypto Destination.
Besides Singapore, Gibraltar is also becoming the new favorite destination for crypto companies.One of the smallest countries in the world has welcomed crypto firms wholeheartedly.
The GFSC in November 2021 approved the DLT license for the Bullish crypto exchange. It is a new exchange platform developed by Block.one.
According to the reports, the government is reviewing plans to formally regulate cryptocurrency. It will open the window for the country of 33000 people to become a hub.
The government is looking forward to cracking a deal with Valereum concerning the takeover of the Gibraltar Stock Exchange. If this happens, it will allow the platform to trade Bitcoin and Dogecoin in addition to traditional bonds.
The government is also considering implementing Blockchain technology in its legal systems. The move will ensure the timely delivery of public services.
The government has partnered with Bitso and IOVlabs for its eGov project. Blockchain technology will help the authorities with speedy and efficient government processes.
The British Overseas territory has always been the greatest supporter of crypto industries. After the Chinese crackdown on crypto, Huobi Global, a Chinese exchange moved to Gibraltar.
El Salvador, UAE, Canada and Gibraltar are not the only crypto-friendly countries. Countries like Australia, Liechtenstein and Germany are also following in the footsteps of pro-crypto nations.
With all the buzz happening around digital assets in 2021, it was surely a flourishing year for the cryptos. ModiCoin helps you to invest in cryptocurrencies through its safe, secure and reliable platform.
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