Background
Initial coin offerings on blockchain platforms have painted the world red for tech startups around the world. A decentralized network that can distribute tokens to users who support an idea with money is both revolutionary and rewarding.
Profitable Bitcoin proved to be an “asset” for early stage investors that delivered multi-faceted returns in 2017. Cryptocurrency investors and exchanges around the world have taken advantage of this opportunity, leading to the rise of many online exchanges. Other cryptocurrencies such as Ethereum, Ripple and other ICOs have promised even better results. (Ethereum grew more than 88 times in 2017!)
While ICOs brought startups millions of dollars in a matter of days, the governing governments initially decided to follow the fastest growing fintechs that could raise millions of dollars in a very short period of time.
Countries around the world are considering regulating cryptocurrencies
But regulators became wary as the technology and its underlying effects gained traction, as ICOs began mulling billions of dollars in funds — including proposed plans written in official documents.
In late 2017, governments around the world jumped at the chance to intervene. While China has completely banned cryptocurrencies, the SEC (Securities and Exchange Commission) in the US has highlighted the risks to vulnerable investors and suggested treating them as securities.
A recent warning issued by SEC Chairman Jay Clayton in December cautioned investors by mentioning,
“Please also consider that these markets span national borders and that significant trading may occur on systems and platforms outside of the United States. Your invested funds can quickly go abroad without your knowledge. As a result, risks may be heightened, including the risk that market regulators such as the SEC may not be able to effectively pursue wrongdoers or recover funds.”
This was followed by concerns from India, in which Finance Minister Arun Jaitley said in February that India would not recognize cryptocurrencies.
On April 6, 2018, the Reserve Bank of India sent a circular to other banks asking them to cut ties with companies and exchanges that trade or deal with cryptocurrencies.
In the UK, the FCA (Financial Conduct Authority) announced in March that it had formed a cryptocurrency task force and would receive help from the Bank of England to regulate the cryptocurrency sector.
Different laws, tax structures in different countries
Cryptocurrencies are basically coins or tokens launched on a cryptographic network and can be traded worldwide. While cryptocurrencies have more or less the same value around the world, countries with different laws and regulations can provide different returns to investors who may be nationals of different countries.
Different laws for investors from different countries would make calculating profits a tedious and cumbersome exercise.
This will entail investment of time, resources and strategies, causing unnecessary prolongation of processes.
The solution
Instead of many countries passing different laws for global cryptocurrencies, there needs to be a single global regulatory body with laws that apply across borders. Such a move would play an important role in expanding legal cryptocurrency trading around the world.
Organizations with a global purpose like the UN (United Nations), World Trade Organization (WTO), World Economic Forum (WEF), International Trade Organization (ITO) are already playing an important role in bringing the world together on various fronts.
Cryptocurrencies were created with the basic idea of transferring funds around the world. They have more or less the same value on exchanges, except for a minor arbitrage.
A global regulatory body to regulate cryptocurrencies worldwide is the need of the hour and can set global rules to regulate the newest ways to finance ideas. Each country is now trying to regulate virtual currencies with legislation that is currently under development.
If the economic superpowers can reach a consensus with other countries to introduce a regulatory body with laws that do not know national borders, it will be one of the biggest breakthroughs in creating a crypto-friendly world and expanding the use of one of the most transparent financial technologies ever  - the blockchain.
A universal regulation consisting of subsections related to cryptocurrency trading, declarations, taxes, fines, KYC procedures, laws related to exchanges and penalties for illegal hacks can give us the following advantages.
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This can make the calculation of profit extremely easy for investors worldwide as there will be no difference in net profit due to the uniform taxation structure
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Countries around the world can agree to share a certain amount of profits as taxes. Thus, countries’ share of taxes collected would be the same worldwide.
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The time required to set up multiple committees, draft bills, and then debate them in the legislative arena (such as the Parliament in India and the Senate in the US) can be saved.
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It is not necessary to consider the strict taxation laws of each country. Especially those involved in multinational trade.
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Even companies offering tokens or ICOs will comply with the mentioned “international law”. Therefore, calculating the after-tax income will be a simple matter for companies
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A global framework will require more companies to offer better ideas, thereby increasing employment opportunities worldwide.
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The law could be facilitated by an international watchdog or regulatory body for global currencies, which could have the power to blacklist non-compliant ICO offerings.
This is not all the benefits when it comes to the law that will regulate cryptocurrencies worldwide. There are certain disadvantages as well as
Getting the world’s financial leaders together to come together and draft legislation can take a long time. Discussions and bringing them to consensus can be difficult
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Countries or economies that provide tax-free structures may not agree to enact a universal tax policy
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The involvement of a global watchdog or regulatory body in monitoring regulatory changes related to ICOs may not be appropriate for some countries
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A universal law can lead to the division of the world into factions. Countries that do not support cryptocurrency such as China may not be part of it.
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The law may be the brainchild of economically strong states, who may design it to suit their interests.
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This law would be centralized with a global regulatory body, unlike cryptocurrencies which are decentralized in nature.
Conclusion
The world was together for the better. Whether it’s creating a peaceful world after World War II or coming together to improve trade laws and agreements.
The International Trade Organization (ITO), the World Trade Organization and the World Economic Forum have some of the best minds defining the global economy.
They can unite and become part of a body that will determine the economic prosperity of the world. They will help develop global cryptocurrency norms and can be part of a regulatory body that will act as a guide and beacon for thousands of ICOs around the world. This may take a lot of time initially, but it will make things easier in the future.