Many nations are actually positively thinking about how to handle crypto currencies (CC’s), they do not wish to lose out on tax revenue, and to some extent they believe they have to regulate the forex market space with regard to consumer protection. Knowing there are scams and incidences of hacking and thievery, it’s commendable that consumer protection has been considered at these levels. The Securities Exchange Commission (SEC) came to exist in the united states just for this type of purpose and also the SEC has put some rules in position for CC Exchanges and transactions. Other nations have similar regulatory physiques and many of them will work away at devising appropriate rules, which is likely the “rules” is going to be dynamic for any couple of years, as governments uncover the things that work well and just what doesn’t. A few of the advantages of CC’s are that they’re NOT controlled by government or Central Bank, so it may be a fascinating tug-of-war for several years to determine just how much regulation and control is going to be enforced by governments.
The larger concern for many governments is the opportunity of growing revenue by taxing the earnings being generated within the CC market space. The central question being addressed is whether or not to deal with CC’s being an investment or like a currency. Most governments to date lean towards treating CC’s being an investment, like all other commodity where earnings are taxed utilizing a Capital Gains model. Some governments view CC’s only like a currency that fluctuates in daily relative value, and they’ll use taxation rules much like foreign currency investments and transactions. It’s interesting that Germany has straddled a fence here, deciding that CC’s used directly for getting services or goods aren’t taxed. It appears a little chaotic and unworkable if all of our investment profits might be non-taxed when we used these to directly purchase something – say a brand new vehicle – from time to time. Possibly Germany will tweak their policy or re-think it as being they’re going along.
It’s also harder for governments to enforce taxation rules given there are no consistent global laws and regulations requiring CC Exchanges to report CC transactions to government. The worldwide and distributed nature from the CC marketplace causes it to be nearly impossible for just about any one nation to understand about all of the transactions of the citizens. Tax evasion already happens, because there are several countries that offer global banking services which are frequently utilized as tax havens, sheltering funds from taxation. By there very nature CC’s were born right into a arena of scant regulation and control by governments, which has both upsides and drawbacks. It will require here we are at governments to exercise all of this by learning from mistakes – it’s still brand new which is why we tout CC’s and Blockchain technology as “game changers”.