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Thailand, prohibits the use and transaction
of cryptocurrencies. Other countries have
imposed severe penalties of up to 12 years
of imprisonment on those dealing with
cryptocurrencies. In Vietnam, penalties for
breaching the prohibition may be a fine of
up to $8800. Some countries, such as South
Korea, are preparing bills banning the trade of
cryptocurrencies.
(2) Countries supporting crypto /digital
currencies:
• Germany: it is the only country to recognize
cryptocurrencies as official digital money.
In preparation to announce the official
introduction of digital currencies in the State,
the government of Germany is striving to
enact relevant laws. The government is also
planning to levy taxes on cryptocurrency
transactions. Japan: It is the world’s biggest
market for digital currencies.
• In Japan, cryptocurrency exchange platforms
are only considered legal if registered with the
Japanese Financial Services Agency (FSA).
• United Kingdom: The trade of
cryptocurrencies is considered legal in the
UK. However, cryptocurrency exchange
platforms and trading institutions are required
to register with the UK Financial Conduct
Authority (FCA). In addition, the trade is to
meet the anti-terrorism and money laundering
standards.
• United States of America: The United States
seeks to regulate the activity of digital
currency exchanges and open the door
for major companies and investors to take
advantage of the available opportunities in
this domain. In January 2014, “Overstock”
became the first online retailer in the United
States to accept cryptocurrency payments
at the international level. “LedgerX LLC”, on
the other hand, was the first cryptocurrency
exchange platform to be approved by the
U.S. Commodity Futures Trading Commission
(CFTC) in 2017 and granted a license to
operate as a legal stock market for digital
currency contracts.
Theme Five: Advantages and risks of
investing in crypto/ virtual/ digital currencies
and their economic impact
(1) Advantages of investing in crypto/ virtual/
digital currencies:
1. Swift transfer of funds.
2. Wider scope.
3. Lower costs.
4. Decentralization and direct engagement.
5. Easier to manage while maintaining the
anonymity of transactions and ensuring a secure
transfer of funds.
6. Flexibility of use.
(2) Risks of investing in crypto/ virtual/ digital
currencies:
1. Absence of regulations.
As of the date
of this research paper, there are no national/
international legal regulations in place that
govern the issuance and trading of digital
currencies. Cryptocurrency activities are merely
subject to technical regulations.
2. Pricing variations and volatility.
There
can be significant variations in the pricing
of the different cryptocurrencies. Compared
with traditional fiat money, the prices of
cryptocurrencies are proven to be highly
volatile.
3. Potential use in suspicious or illegal
activities.
Cryptocurrencies may be used in
Research
