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What is YOUR Government Going to Do About Crypto?

Many nations are now make an effort to considering what to do about crypto currencies (CC’s), as they cannot want to miss out on tax revenue, and to some degree they think they need to regulate the foreign exchange market space in the interests of consumer protection. Knowing that there are scams and cases of hacking and thievery, it is extensive that consumer protection is being Equipment thought of at these levels. The Securities Exchange Commission (SEC) came into being in north america for such a purpose and the SEC has already put some regulations in place for CC Deals and transactions. Other nations have similar regulatory bodies and most of them work away at devising appropriate regulations, and it is likely that the “rules” will be dynamic for a few years, as governments discover what useful and what does not. Some of the benefits of CC’s are that they are NOT controlled by any government or Central Bank, so it could be an interesting tug-of-war for many years to see how much regulation and control will be included by governments.

The bigger concern for most governments is the potential for increasing revenue by hectic the profits being generated in the CC market space. The central question being addressed is whether to treat CC’s as an investment or as a currency. Most governments so far lean towards treating CC’s as an investment, like every other product where profits are taxed using a Capital Gains model. Some governments view CC’s only as a currency that varies in daily relative value, and they’re going to use taxation rules similar to foreign exchange investments and transactions. It is interesting that Germany has straddled the wall here, deciding that CC’s used directly for purchasing goods or services are not taxable. It seems a bit topsy-turvy and unworkable if all our investment profits could be non-taxable if we used them to directly buy something : say a new car : frequently. Perhaps Germany will fine tune their policy or re-think it as they go along.

It is also more difficult for governments to implement taxation rules given that there are no consistent global laws requiring CC Deals to report CC transactions to government. The global and distributed nature of the CC marketplace makes it almost impossible for any one nation to know about all the transactions of their citizens. Tax evasion already happens, as there are several countries that include global banking services that are often used as tax havens, sheltering funds from taxation. By there very nature CC’s were born into a realm of scant regulation and control by governments, and that has both upsides and cons. It will last time for governments to work through all this by learning from your errors : it is still all new and it is why we tout CC’s and Blockchain technology as “game changers”.

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