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On Wednesday November 7 the French National Assembly’s Finance Committee amended the bill of finance to “clarify and simplify the tax regime applicable to crypto-assets.” The amendments will come into play from January 1, 2019.
- A 30% one-off flat rate fee will be applied to profits from the sale of crypto assets. This would apply to any crypto assets that are converted into “lawful” currency, or assets “used as a means of payment for the acquisition of goods or services”;
- There is a discussion of applying the flat tax to Bitcoins as well.
These amendments follow a stream of recent rules and regulations to cryptocurrencies that nations around the world are implementing. When Bitcoin came into the public sphere one of its main selling points was that its a currency that is untraceable and undetectable, allowing its users anonymity that isn’t afforded with traditional banking. This also became true for the newer cryptocurrencies that cropped up after Bitcoin. However, as cryptocurrencies have grown in use and popularity, governments around the world are feeling more and more pressure to regulate its use.
The regulation of cryptocurrencies is a hot topic in the industry, as far as governments are concerned they have a few motives for regulation. Firstly, the anonymous nature of the cryptocurrency gives way to fraudsters and criminals to take advantage of people; and secondly governments are realizing this is an industry they can capitalize on through taxation (although not everybody). It is also important to bear in mind that with the emergence of cryptocurrencies, we have seen an emergence of innovation not seen at this level in the finance industry in decades.
Industry leaders have concerns that over-regulation would lead to a stifling of innovation. With having so much potential to transform the financial markets for the better, this is a sensitive topic that should be handled with caution. Some people rightly feel that if cryptocurrencies need to be regulated, there also needs to be a compromise struck where anonymity remains an important feature of the currency.
The public is becoming increasingly frustrated with offering up their information only for data breaches and hacks to occur, exposing their private information. Hopefully, as this issue mature, we’ll see more and more governments opening think tanks where they can discuss the best way to regulate cryptocurrencies without trying to fit them into the same box traditional currencies are in.