Cryptocurrency Regulations World Map - United States

​The cryptocurrency market of the United States reached $1.6 billion at the end of 2021. Some reports made forecast that the U.S market is expected to grow at CAGR (compound annual growth rate) of 7.1% in the years to come, and increase to approximately $2.2 billion in 2026. Statistically, there are about 27 million U.S. residents (some 8.3% of the total population) are in possession of some type of cryptocurrency. Among them, 46% are using crypto for payments, while the rest for investment purposes.

As the sole superpower, and a developed country with the largest economy in the world, how crypto is regulated in the United States will largely affect the global market. In this article, we review the crypto regulatory status quo in this country, and make our predictions for what might come in the future.

- Crypto Legality

Cryptocurrencies, including NFTs, are still treated as "assets" in the United States. The Commodities Futures Trading Commission (CFTC) regulate crypto by continuing seeing it as a type of commodities. In addition, the US Securities and Exchange Commission (SEC) requires that all virtual currencies being traded within the U.S. shall be lawfully registered.

Both the Financial Crimes Enforcement Network (FinCEN), affiliated to the Treasury, and the Internal Revenue Service (IRS), have laid out transparency and taxation requirements. According to FinCEN, cryptocurrencies are not considered to be legal tender. However, crypto exchanges are considered to be money transmitters on the basis that such tokens are "other value that substitutes for currency". In U.S laws, a money transmitter or money transfer service is a business entity that provides money transfer services or payment instruments.

For IRS, cryptocurrencies are deemed as "a digital representation of value that functions as a medium of exchange, a unit of account, and/or a store of value", and thus a tax guidance was issued accordingly.

- Top Crypto Exchanges in the U.S.

Coinbase

Founded in 2012, the Nasdaq-listed exchange is U.S-based. As of March 2021, Coinbase is the largest exchange in the U.S. market by volume. In 2021, the company saw an 8.5x increase in transaction volume, with 89 million verified users from all over the world. According to the company's own statistics, its monthly transaction users grew to 11.4 million last year, four times the number in 2020.

Robinhood

Robinhood is a U.S-based financial services company, which had over 13 million users in 2020. In 2018, Robinhood officially launched a commission-free crypto trading service. At present, the company's currencies available for trading include mainstream ones such as Bitcoin, ETH, Dogecoin, and Litecoin. Just in April 2022, Robinhood announced the addition of new coins such as Shiba Inu and Solana.

Binance

Although Binance faced regulatory woes in several countries last year, that didn't stop the crypto exchange, which was originally founded in a country that has now outlawed cryptocurrencies — China — to maintain its status as the world's largest crypto exchange. For U.S. users, they need to go to a dedicated link, Binance.us, the only U.S.-regulated Binance branch that allows Americans to buy and sell more than sixty cryptocurrencies.

- Where the Crypto Regulation in the U.S. is Going?

Crypto laws are urgently needed, according to the US Treasury, to prevent global and domestic criminal activity. In December 2020, FinCEN recommended a new data collection obligation for those in charge of cryptocurrency exchanges, digital assets, DTLs, and crypto payments, as well as for people who manage certain private digital wallets.

To guarantee effective consumer protection and more streamlined regulatory supervision, the Justice Department continues to cooperate with the SEC, CFTC, and other agencies on potential cryptocurrency rules. The Covid-19 pandemic, on the other hand, has hampered (though increased the urgency of) efforts to progress cryptocurrency legislation in the United States, thus the government approach has remained sluggish. Despite setbacks, US politicians are nonetheless eager to regulate cryptocurrencies in anticipation of their possible disruptive influence on the world's most powerful currency, the US dollar, as well as the effects that private and centrally backed currencies may have.

In March 2022, the U.S. President Joe Biden signed an executive order, "Ensuring Responsible Development of Digital Assets". The order, too, promises that the White House will take part in crypto research, and make government departments to work together to build a digital assets regulatory framework.