Since its birth in 2008, cryptocurrency has grown in popularity and become an important part of the global financial system. Cryptocurrencies may significantly alter financial structures as they exist today and transform the next generation of money and payments. However, these changes come with significant concerns around cryptocurrencies for their potential negative impacts on markets, investors, users, and the environment. Governments around the world are looking to create regulations to prevent these harms while encouraging the innovative capabilities of cryptocurrencies.
We look at 45 countries— this includes G20 member states, in addition to countries with the highest rates of cryptocurrency adoption. This new research categorizes and explains how the world’s largest economies and those with high rates of cryptocurrency activity are regulating cryptocurrencies.
45 countries
We analyze how 45 countries have regulated crypto-assets in their jurisdictions. For each country, the regulated actors can be cryptocurrency issuers, cryptocurrency exchanges, traditional financial institutions, service providers, or miners.
Legal status
Each country is assigned one of the following regulatory statuses: legal (where all activities are permitted), partial ban (where one or more activity is not permitted), and general ban (where all activity is limited).
Regulatory categories
Countries regulate actors in the crypto sector using tax policy, requirements to combat money laundering and terrorist financing, consumer protection rules, and licensing and disclosure obligations. The map below considers these four categories of regulation.
Click on a country to see status. Click on “see more” to view further details.
Key findings
Amongst the 45 countries we studied, cryptocurrency is legal in 20, partially banned in 17, and generally banned in 8. In ten G20 countries, representing over 50% of the world’s GDP, cryptocurrencies are fully legal. Regulation is under consideration in all G20 countries.
Emerging-market economies lag behind advanced economies on regulatory development. Of the advanced economies studied, 64% have regulations in place on taxation, AML/CFT, consumer protection, and licensing. This is true for only 11% of emerging market countries.
Among the countries reviewed, there is a generally weak relationship between cryptocurrency adoption rates and regulatory restrictiveness. Six of the top ten countries in cryptocurrency adoption have partial or general bans in place.
Crypto-asset regulations are changing rapidly. Of the countries reviewed, nearly 75% are in the process of making substantial changes to their regulatory framework, often through new, bespoke legislation addressing cryptocurrency markets.
Experimentation is widespread. Countries use regulatory sandboxes to test and co-operate with the private sector. Japan created an association of cryptocurrency exchanges and issuers in an attempt to encourage self-regulation. Canada, Italy, Mexico, and Saudi Arabia have developed regulatory sandboxes.
Since the fall of FTX, cryptocurrency exchanges have come under more scrutiny. Regulatory authorities globally are looking to promote responsible industry standards and prevent negative impacts arising from regulatory arbitrage.
Stablecoins, which are usually backed by a fiat currency, constitute the next frontier of crypto regulation. In the EU, US, UK, and Thailand stablecoin regulation is under consideration. In Mexico, financial institutions cannot issue stablecoins.
Consumer protection rules are lagging behind. Only one-third of the countries reviewed have rules in place to protect consumers. Such rules include advertising regulations, cybersecurity requirements for service providers, investor accreditation, and others. These rules can successfully prevent fraud.
Of the 45 countries analyzed, over 90% have active central bank digital currency (CBDC) projects in addition to cryptocurrency regulations. This indicates that countries adapt and update cryptocurrency regulations simultaneously as they explore CBDCs.
The Role of Global Governance Institutions
Standard setting bodies play an important role in creating governance and industry standards in addition to promoting global cooperation on crypto-asset regulation.
Click on the legend to see details. Hover and click on a card to view more details.
Research team: Ananya Kumar, Greg Brownstein and Alisha Chhangani
Development team: Frank Ngoga and Christophe de Jonge
Cryptocurrency adoption rates are from Chainalysis’ “Geography of Cryptocurrency 2022” report.
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