Australia, Canada, Estonia, the EU, France, Germany, Gibraltar, Holland, the Isle of Man, Japan, Jersey, Luxembourg, Singapore, Switzerland and the USA have acted or are acting to regulate Bitcoin. Bangladesh, Bolivia, Ecuador, Iceland and Kyrgyzstan have banned it.

Another tranche of countries - Brazil, Bulgaria, Denmark, Finland, Italy, Norway, Slovenia, Sweden and the UK - have stopped short of regulating Bitcoin but have imposed taxes on it. All this data comes from a global report entitled 'Bitcoin, Blockchain & Initial Coin Offerings' and published by the international law firm of Pinsent Masons.

The report covers recent developments in Australia, mentioning the Australian Securities and Investments Commission's initial coin offering rules. It says that Bitcoin is regulated under the money-laundering and terrorist-financing laws in Canada and there are requirements for operating as a Bitcoin exchange. In Canada, only two registration regimes exist: one for Quebec and one for the remainder of the country. Canada’s central bank, the Bank of Canada, and five other Canadian banks are experimenting with blockchain technology and a possible digital dollar as the growing demand for digital fintech payment systems puts the squeeze on the traditional banking sector. The big Canadian banks are also members of the R3 Consortium, which has more than 75 member banks worldwide and whose task is to develop a standard for blockchain technologies for banks.

On 25 July the US Securities and Exchange Commission declared that because certain species of ICO tokens were marketed with the promise of profits, they behave like securities. The Howey test was used, which is a longstanding mechanism used by the Supreme Court and the SEC to define whether an instrument is a security or not. New York is the only state to have comprehensive regulations aimed specifically at crypto-currencies.

On 1 April, Japan changed its laws to categorise Bitcoin as a 'legal payment option'; Pinsent Masons takes this to mean that regulations governing banks and financial institutions now apply to cryptocurrency exchange platforms. Bitcoin exchanges will be required to comply with AML and 'know your customer' (KYC) rules, undertake annual audits and meet stated capital and cyber-security requirements.

On the continent of Europe, Estonia will be issuing its own virtual currency, Estcoin, through an ICO with the help of Ethereum founder Vitalik Buterin. As readers of this publication already know, the EU has decided to extend the scope of its fourth Money Laundering Directive to include digital currencies. Bitcoin exchange services operating in France must have an agreement from the central bank, or work with a registered company for holding funds. In Germany, meanwhile, bitcoins are regarded as legally binding financial instruments that fall into the category of units of account, which are not classified as foreign currency but as ‘private money’. Germany declared bitcoin exempt from value-added tax in 2015. It plans to regulate and tax the digital token as a commodity. The report states confidently that Gibraltar's new draft law (covered here) "will place [it] at the forefront of regulation in the technology-driven sector of the global financial services industry."

Remaining on the European continent, Luxembourg granted a license to a Bitcoin exchange called Bitstamp in April last year, making it Europe’s first fully regulated payment institution for the cryptocurrency with the aim of making bitcoin exchange safer. Bitcoin exchanges in Luxembourg must be fully regulated by the Commission de Surveillance du Secteur Financier (CSSF), the financial regulator. Holland views Bitcoin as a medium of exchange but does not regulate or monitor Bitcoin trade. The authorities are considering taking measures, however, to curb money laundering and illicit practices using bitcoin. Bitcoin businesses in Switzerland are subject to anti-money-laundering regulations and, in some instances, may need to obtain banking licences. In 2016, the Swiss town Zug added bitcoin as a means of paying city fees. Swiss Federal Railways sells bitcoins at its ticket machines.

On 1 August the Monetary Authority of Singapore said that if a digital token constitutes a product regulated under the jurisdiction's securities laws, the offer or issue of digital tokens must also comply with these laws. The regulator issued a “Guide to Digital Token Offerings” last week. In Hong Kong, meanwhile, Bitcoin is viewed as a digital commodity. The only role of the Government is to advise people against using 'cryptos' because they are risky investments. Regulation has not been ruled out entirely, with the Hong Kong Monetary Authority ensuring that it keeps a close eye on Bitcoin usage in the territory.

Pinsent Masons' list of countries that do not regulate Bitcoin is as follows: Albana; Argentina; Belgium; Croatia; Cyprus; the UAE; Ghana; Greece; Hong Kong; Hungary; India; Indonesia; Ireland; Malta; Malaysia; Nigeria; Poland; Portugal; Romania; South Korea; Thailand; Turkey; and Venezuela.