Numerous nations are now actively thinking about what to do about crypto foreign currencies (CC’s), as they do not wish to miss out on tax revenue, and also to some degree they think they need to control this market space for the sake of customer protection. Knowing that there are frauds and incidences of cracking and thievery, it is good that consumer protection has been thought of at these amounts. The Securities Exchange Commission rate (SEC) came into being in the USA for such a purpose and the SECURITIES AND EXCHANGE COMMISSION’S has already put some regulations in position for CC Exchanges as well as transactions.
Other nations possess similar regulatory bodies and many of them are working away in devising appropriate regulations, which is likely that the “rules” is going to be dynamic for a few years, because governments discover what works well and does not. Some of the benefits of CC’s are that they are NOT managed by any government or even Central Bank, so it might be an interesting tug-of-war for many years to find out will crypto increase and manage will be imposed by authorities. The bigger concern for most government authorities is the potential for increasing income by taxing the profits becoming generated in the CC marketplace space.
The central issue being addressed is whether to deal with CC’s as an investment or perhaps as a currency. Most governing bodies so far lean towards dealing with CC’s as an investment, such as every other commodity where earnings are taxed using a Funds Gains model. Some health systems view CC’s only like a currency that fluctuates within daily relative value, and they’ll use taxation rules much like foreign exchange investments and dealings. It is interesting that Indonesia has straddled the fencing here, deciding that CC’s used directly for purchasing services or goods are not taxable. It seems a little chaotic and unworkable in case all our investment income could be nontaxable if we utilized them to directly buy some thing – say a new vehicle – every so often. Perhaps Australia will fine tune their plan or re-think it as each goes along.
It is also more difficult with regard to governments to enforce taxation rules given that there are absolutely no consistent global laws needing CC Exchanges to statement CC transactions to federal government. The global and distributed character of the CC marketplace can make it almost impossible for any one country to know about all the transactions of the citizens. Tax evasion currently happens, as there are several nations that provide global banking solutions that are often used as taxes havens, sheltering funds through taxation. By there really nature CC’s were created into a realm of short regulation and control through governments, and that has each upsides and downsides. It will take coming back governments to work through all this simply by trial and error – it is nevertheless all new and it is why all of us tout CC’s and Blockchain technology as “game changers”.