Many countries are now seriously considering what to do with crypto currencies (CC’s), as they do not want to miss out on taxes, and to some extent they think they need to improve the market environment to protect consumers. Given that there are frauds and incidents of theft and burglary, it is commendable that customer protection is considered at these levels. The Securities Exchange Commission (SEC) was established in the USA for such purposes and the SEC has already enacted other rules for the exchange and exchange of CC. Some countries have similar institutions and many of them are working to make appropriate laws, and it seems that these “laws” will be useful for a few years, while governments will recognize what works and what doesn’t. One of the advantages of the CC is that it is NOT controlled by the government or the Central Bank, because it can be an interesting debate for many years to see the extent of its administration by governments.
What worries many governments is the potential for increased revenue by paying taxes that are available in the CC market. The big question being asked is whether CCs are money or money. Many governments currently rely on CC funds as cash, just like anything else that is taxed using the Capital Gain type. Some governments simply view the CC as a currency that fluctuates on a daily basis, and will apply the same tax laws as foreign exchange and transactions. It is interesting that Germany has filled the fence here, I think CC is used directly to buy goods or services do not pay tax. It would seem confusing and ineffective if all our profits were tax-free if we used to buy something – say a new car – on a regular basis. Maybe Germany will change their minds or reconsider how they are going.
It is also difficult for governments to comply with tax laws as there are no international laws that require the CC Exchange to change reports of government actions. The global and shared climate of the CC market makes it impossible for one country to know all the activities of its citizens. Tax evasion has already taken place, as there are several countries that provide banks around the world that are used as tax havens, to hide money from taxes. Then CCs of their kind are born in a few government-controlled areas, and this has a negative and low impact. It will take time for governments to use this to experiment – everything is new and that is why we consider CC and Blockchain expertise as “game changers”.
Listen to yourself