Money or Assets? How World Governments Define Cryptocurrencies

As a result, cryptocurrencies lack a single, definite existence, with some nations treating them as money and others treating them as an unregulated, speculative asset, making them the financial equivalent of Schrödinger's cat.

As an indication of how difficult it may be for world governments to ever reach a global consensus on the status of cryptocurrencies, it's worth pointing out that there's currently little consensus within nations - let alone among them.

First up is the Securities and Exchange Commission, which - up until June - defined cryptocurrencies in general as securities, meaning assets in which someone invests in the expectation of receiving a return.

Observers would be forgiven for supposing that three separate definitions were enough, yet two additional agencies treat cryptocurrencies as money.

In Latvia, the State Revenue Service and the Bank of Latvia have both asserted that cryptocurrencies represent a 'contractual' medium of payment - a status that's just short of money but close enough in functional terms.

With the notable exceptions of Switzerland and Germany, the majority of European states deny that cryptocurrencies are money and given how jealously governments and central banks tend to guard their financial powers, it's unlikely they'll shift from this stance anytime soon.

In Japan, the government has gone through an opposite process to China's, classing Bitcoin as "Not currency" in 2014 and then correcting its position in March 2016, when the Payment Services Act finally recognized cryptocurrencies as money.

These include a June update to AML laws that requires crypto exchanges to undertake Customer Due Diligence and Enhanced CDD measures, something which makes good on the government's February promise to help foster the "Normal" trading of cryptocurrencies as assets.

In Singapore, the government is also inclined to view cryptocurrencies as assets rather than money.

Because most governments are still unsure of how cryptocurrencies will develop in the future, and possibly because they don't want to recognize the radical implications of decentralized money, they've shied away from establishing a distinct legal identity for cryptos.