Cryptocurrency regulations are high on the agenda of governments around the world. However, some countries are teaming up to add new rules … in their own way.
Towards new regulations on cryptocurrencies in favor of the taxman
While the need to enforce cryptographic regulations generally seems clear, everyone has their own recipe. While the European Union is focusing on the final details needed to implement the MiCa law, the United States appears more in favor of collective regulation. What could be done shortly since the G20 would have decided to add one more rule to the existing laws.
The Organization for Economic Cooperation and Development (OECD) has in fact invited the major world powers to meet to agree on new tax regulations regarding cryptocurrencies. The topic had already been discussed in Europe where the MiCa law proposes the identification of users and the traceability of their transactions. However, according to the OECD, the anti-tax evasion system will only be effective if most countries of the world participate. To speed up the negotiations, the organization presented a report that is currently under discussion among the G20 countries in Washington. China, South Korea, Brazil, the United States, the United Kingdom, India or the European Union will have to decide, among others, the best course of action.
The report in question also includes some proposals for actions that could be implemented in the long term to prevent the money from going unnoticed abroad. Called CARF, these include monitoring and tracking of all cryptographic transactions that will be recorded in a ledger. Thanks to the latter, tax returns will be made automatically and any anomalies within those made annually by private individuals can be identified and corrected. The OECD also proposes the large-scale use of CBDCs, which are monitored automatically, to facilitate the monitoring of movements.
For now, no return has been made on the first day of debate held yesterday. Negotiations are expected to conclude today, so expect more information in the coming days.
The legal status of cryptocurrencies is still under discussion
However, according to the OECD report, regulation of cryptocurrencies will only be effective when the legal status of the latter is defined. This debate is problematic in most countries of the world, as it is in Europe that the true nature of NFTs and stablecoins is still under discussion. As for more well-known tokens such as Bitcoin, it is still unclear whether they should be considered as securities or simply as an asset.
The US is particularly illustrated on the side of this issue, most notably through the SEC’s lawsuit against Ripple. It could therefore be that the new legislation on tax evasion is not immediately passed by the G20 but leads to new discussions on the legal respect to be accorded to digital currencies. Meanwhile, each country will have to fight in its own way through its own laws.
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