Schlagwort: crypto regulation

György Matolcsy , the governor of Hungary’s central bank (MNB), wants to see the European Union (EU) ban crypto trading and mining.

In a press statement published on the official MNB website, Matolcsy noted that it’s time for the eurozone to undertake the tough regulatory step.

In his view, cryptocurrencies can be used to perpetuate illegal activities. He also noted that the crypto space tends “to build up financial pyramids,” alluding to long-held criticism that crypto is a bubble’

“The EU should act together in order to preempt the building up of new financial pyramids and financial bubbles,” he added.

He pointed to China’s ban on crypto trading and mining in 2021 and the proposal from Russia’s central bank that the country needed to take similar steps.

“I perfectly agree with the proposal and also support the senior EU financial regulator’s point that the EU should ban the mining method used to produce most new bitcoin,” he said in the statement.

His comments on Russia however come days after Moscow and the Russian central bank reached an agreement to have cryptocurrencies regulated.

He proposes that EU citizens and other investors can be allowed to access and own crypto assets outside of the block.

However, regulators would still track these holdings, the MNB chief added.

His comments come at a time the EU has indicated development of a digital euro is on track.

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The Russian government and the Bank of Russia look to have crypto regulated as currencies, local reports have suggested.

Russia is set to formally recognise cryptocurrencies as currencies, news reports out of the country suggest.

According to the reports, published on Wednesday morning, the move follows an agreement between the government and the central bank on how to regulate the $2 trillion industry going forward.

BREAKING: The Russian government and central bank have just reached an agreement on cryptocurrencies, according to Russia’s Kommersant.

Both organizations will treat bitcoin and crypto assets as currencies.

— Pomp 🌪 (@APompliano) February 9, 2022

Local news outlet Kommersant reported that Russia was looking at unveiling new laws set to make it legal for people to use digital assets in the country’s financial system.

The move allows for cryptocurrency purchases although authorities expect every user to be registered and fully verified via locally regulated companies. This will also apply to foreign-based providers looking to offer crypto-related services in the country, which in this case means getting registered and establishing local offices.

New laws, including KYC checks

A draft law is expected by 18 February, the publication added, noting that cryptocurrencies will be designated as an “analogue of currencies” and not digital financial assets.

Crypto users will be expected to report all transactions exceeding 600,000 rubles, with penalties set if this isn’t adhered to. Other than that, it is suggested that the use of crypto for illegal transactions will be a felony.

To help bring these proposals into effect and ensure compliance, the government and the Bank of Russia want banks to be incorporated as intermediaries. They will be expected to link crypto users and digital asset exchanges, helping in identity checks and transaction tracking as well as holding users’ transaction details for five years.

No ban!

Russia has previously looked to ban cryptocurrencies, with authorities noting in earlier reports that cryptocurrencies were a potential threat to financial stability. The about-turn could therefore be a harbinger of even more positive regulatory frameworks that support the nascent industry. 

It also means that the country might have moved away from that outlook that saw the central bank call for a total ban on crypto trading and mining. 

Last month, former president Dmitry Medvedev suggested banning crypto in the country would likely lead to an opposite impact.

Recently, India moved to recognise cryptocurrencies after previous calls to ban them and imposed a 30% tax on crypto transfers. The US is also looking to regulate the crypto industry, with the immediate focus largely on stablecoins as highlighted in the President’s Working Group on crypto report.

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Stablecoin regulation is one of the key issues in the President’s Working Group on crypto.

US Treasury Undersecretary for Domestic Finance has said there is a need for Congress to move with speed in enacting legislation related to the fast-growing stablecoin market.

Nellie Liang noted this during an interview with Bloomberg on Tuesday, noting that the lawmakers need to ensure there are regulatory guardrails in place to provide for innovation as well as offer protection to consumers.

According to Liang, the matter is an urgent one given how rapidly the cryptocurrency stablecoin market has grown over the past two years.

She told Bloomberg that lack of clarity on the subject hurts innovation and creates regulatory risks. She added that at the moment, US regulators cannot adequately address all the risks likely to come with stablecoin adoption.

The Treasury official believes Congress has the power to lend a helping hand to the likes of the US Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).

Congress can help close the “regulatory gaps,” noting some of these are already hinted to in the Presidential Working Group (PWG) report on cryptocurrency and stablecoin.

Liang also noted during the interview that the PWG report forms part of a wider effort from the US government towards crypto regulation. She also believes Biden’s administration is set to provide further details on how authorities plan to handle the issue of promoting innovation and financial inclusion.

However, she says stablecoins’ “potential” for use in payments comes with a “whole set of issues,” including its use in illegal financial transactions.

The stablecoin market is currently a multi-billion industry, growing fifteenfold since 2020 amid increased adoption across retail and institutional levels.

Last week, Meta Platforms ended its Diem stablecoin project citing regulatory challenges. The Facebook parent sold Diem’s intellectual property and assets to Silvergate Capital, which plans to invest further into the innovation.

The post Treasury official calls for “urgent” stablecoin legislation from US Congress appeared first on Coin Journal.

• India’s Finance Minister had announced a 30% tax on all crypto income, including NFTs

• Tax chief JB Mohapatra says the step doesn’t equate to legalizing crypto trading in the country.

Tuesday’s budget speech by India’s Finance Minister Nirmala Sitharaman included a provision for a 30% tax on crypto income, prompting reactions from across the crypto community that the country had signaled recognition for crypto assets.

But in a statement made after the budget speech, Central Board of Direct Taxes (CBDT) chairman JB Mohapatra looked to clarify that this view could be wrong.

According to the CBDT boss, the finance ministry’s move to tax cryptocurrencies should not be taken to mean that trading in these digital assets is officially legal.

He said that taxing crypto trades under the new laws has no connection whatsoever with their legality.

Crypto “do not ipso facto become legal or regular just because you have paid taxes on that,” Mohapatra noted in the interview.

He added that while the move to introduce the taxes widens the tax bracket and gives the taxman an extra net to target potential cheats and other illegal activities.

Despite this obvious benefit, he explained, only a proper regulatory framework on cryptocurrencies could spell the legality or otherwise of trading of the asset class.

India will launch its central bank digital currency in the next one or two years, even as it looks to bring private cryptocurrencies under government regulation.

The post Taxes don’t mean crypto trading automatically becomes legal, Indian tax official says appeared first on Coin Journal.

The 30% tax is the highest income tax bracket in India

India will also launch its digital rupee in the financial year 2022-2023, the Finance Minister said.

India will begin levying a 30% tax on all income from cryptocurrency transfers, according to the country’s Finance Minister Nirmala Sitharaman.

In a budget speech delivered on Monday, the minister noted that the 2022-23 financial year will see authorities seek to bring all digital assets transfers and income, including non-fungible tokens (NFTs) under the tax umbrella.

Apart from the 30% levy on gains, India will also have a 1% tax the government official said will be deducted at source (TDS). This levy will apply to payments or fees paid in relation to the transfer of cryptocurrencies, Sitharaman added.

Gifts made in crypto will also be taxed, according to the ministers’ tax proposals, with the taxman targeting recipients of crypto gifts.

According to the Finance chief, losses incurred on cryptocurrency investments will not be offset with gains made elsewhere.

The crypto capital gains tax and other levies appear to show the government has finally recognised crypto in India. It signals a marked shift from the previous calls for a blanket ban, with Changpeng Zhao, the CEO of the world’s largest cryptocurrency exchange by trade volume Binance, among those to point out the likelihood of this development.

Crypto is legally recognized in India, with a 30% tax.

— CZ 🔶 Binance (@cz_binance) February 1, 2022

The 30% tax rate is double that of 15% levied on short capital gains for stocks. However, the crypto community has been quick to point out that India’s proposal falls in one of the tax brackets into which most crypto holders already fall.

30% is one of the income tax slab in India and most of the crypto investors are already in that category.. Just glad #Crypto is officially recognised in India now and yes, tax on payments is just 1% 🙂

— Pawan Sharma | Cross-Chained (@CoinClues) February 1, 2022

Digital Rupee in 2022-2023

India is also ready to roll out a central bank digital currency, the Finance Minister said during the budget speech. According to her, the digital rupee will launch in the 2022-2023 financial year.

„Introduction of a central bank digital currency will give a big boost to digital economy. Digital currency will also lead to a more efficient and cheaper currency management system,“ she told lawmakers.

The tax proposals and move towards a CBDC come after months of speculation on what path the country was taking as it looks to regulate the burgeoning crypto industry.

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