It has been a decade and a half since Bitcoin hit the market. Fifteen years of development and community input have allowed it to blossom into a handy payment solution. What is more, it has laid the groundwork for countless cryptocurrencies and crypto-related investment opportunities. It is, therefore, blatantly obvious that crypto is here to stay. The question now is, how will governments around the world try to tax it?

What Bothers Governments

The reasons why individuals love cryptocurrencies are the same reasons that make governments hate them. Cryptocurrencies are decentralized, which means that no central authority controls them. Their decentralization is joined by the highest level of anonymity out of all currently available payment methods. It is this combination of decentralization and anonymity that prevents governments from seizing private assets or imposing taxes on them. While certain criminals, such as money launderers, love to exploit these mechanisms for illegal purposes, most crypto enthusiasts just want to throw away the shackles of infinite regulations and outdated banking practices. However, it is this criminal activity, especially tax evasion, that governments use to legitimize various regulations.

Government Solutions Around the World

An unwritten rule in the world of crypto regulations is that most countries do not have any regulations. While every country expects you to inform your local tax organization of your overall income, few countries impose direct tax regulations on your crypto transactions. But there are always exceptions to every rule.

The complete opposite of no crypto regulation was implemented in China and India, where the local governments have taken a hard stance against crypto gambling. While some operators in India ignore these government regulations, those in China follow the rules to a T. These types of bans come from either a desire to completely control the population’s payment methods or a realization that regulating completely anonymous transactions may be futile.

An interesting middle ground between no regulation and an outright ban is the United States. There, the legal landscape for crypto gambling is complex, to say the least. While there are currently no federal laws addressing crypto gambling, there are states such as Nevada and New Jersey that place regulations on crypto gambling. Most other states do not have any regulations directly targeting crypto, so those are essentially the Wild West.

Blockchain Islands

While ignoring crypto regulations often comes from a lack of crypto understanding, creating smart regulations comes from a place of exceptional crypto understanding. It, therefore, comes as no surprise that the world leaders in crypto regulations are Malta and Curaçao, two of the world’s most respectable gambling hubs.

Let us first look at Malta and its Virtual Financial Assets Act, or VFAA for short. The latter is a licensing system for various crypto-related activities like exchanges, custody services, and initial coin offerings (ICOs). The core components of these are anti-money laundering (AML) and know-your-customer (KYC) procedures. While these are not direct tax regulations, they are essential to keeping the crypto sphere regulated. However, there are also more liberal regulations from the world’s best gaming islands.

The government of Curaçao goes hand in hand with iGaming. Their crypto regulations are far less stringent. They currently do not require a license for crypto activities. Moreover, they do not have specific laws for cryptocurrencies, and their regulatory framework is less robust. However, their new National Ordinance on Games of Chance (LOK) has been allowing crypto payments since 2023, hinting at potential broader crypto regulations. While these were certainly progressive, they will not be as progressive as those of the following government.

Progressive Government Solutions

El Salvador shocked the world in September 2021 when it recognized Bitcoin alongside the US dollar as a legal tender. The government started its crypto incentives by launching a digital wallet called Chivo to facilitate Bitcoin transactions. This rocked the value of Bitcoin and led to odd fluctuations that eventually led to an increase in value. However, it proved that cryptocurrencies can help people access banking from even the most remote and disadvantaged areas. Moreover, it laid the groundwork for a new technological revolution.

From Legal Trouble to The Future of Tech

There are no regulations that can make crypto disappear. Moreover, most countries have completely ignored crypto outside of tax obligations. You can, therefore, use any cryptocurrency that you please for your online gambling transactions. While your transactions are recorded on the blockchain, you cannot have your personal identity leaked. We cannot predict exactly what will happen in the world of crypto regulations tomorrow, but we can say that crypto will integrate into broader metaverse solutions, which will eventually receive regulations all around the world.