New Zealand’s Taxman Suggests Elimination of Crypto Taxes

New Zealand’s Taxman Suggests Elimination of Crypto Taxes
February 27, 2020

 

The cryptocurrency market has entered into a bearish mode with Bitcoin (BTC) plunging below $9,000. In the past 24 hours, Bitcoin, which has a market cap of $159.06 billion, has lost 5.6% to trade at $8,690.62. Ether (ETH) has lost 9.7% to trade at $217.28. XRP has lost 6.1% to trade at $0.2298. Other major (top 20 by market cap) altcoins which have lost in the past 24 hours includes IOTA (IOTA-$0.2058, -12.7%), Cardano (ADA-$0.0484, -10.4%), Bitcoin Cash (BCH-$319.07, -5.4%), Monero (XMR-$68.55, -8.8%), Dash (DASH-$83.24, -7.8%), Tron (TRX-$0.01652, -5.2%), Stellar (XLM-$0.0577, -7.0%), EOS (EOS-$3.49, -10.2%), Litecoin (LTC-$59.66, -12.7%), Huobi (HT-$4.59, -3.4%), Ethereum Classic (ETC-$7.61, -13.4%), Binance Coin (BNB-$18.28, -5.7%), Cosmos (ATOM, $3.51, -9.9%), OKB (OKB-$5.50, -0.3%). The only major (top 20 by market cap) altcoin which has gained in the past 24 hours is LEO (LEO-$0.9686, 7.3%), ChainLink (LINK-$3.66, 8.5%) and Tezos (XTZ-2.77, 2.6%).

 

Government level initiatives

IRD tables recommendations on GST policies related to cryptocurrencies

New Zealand’s Inland Revenue Department (IRD) has tabled new suggestions on GST (Goods and Services Tax) policies related to cryptos and has requested public opinion on the subject. The document published by the country’s tax authority includes suggestions for the betterment and streamlining of tax invoice standards and omission of cryptos from precise GST rules.

The document acknowledges the existence of a quickly growing cryptocurrency market in the country and anticipates that most partakers will laud the suggested rules, or propose broader tax and regulatory overhaul. The department primarily intends to make sure that the tax rules do not establish an act as a barrier for crypto-related innovations.

The document reads as follows: “The definitions used for money or financial services as “exempt supplies” (meaning they are not subject to GST) did not contemplate crypto-assets, meaning GST may be imposed on certain types of crypto-assets, but not others – depending on their particular purpose and design. This inequitable GST treatment is unintentionally favoring certain types of crypto-assets over others and likely resulting in a distortion in the crypto-asset marketplace.”

In particular, the regulator suggests the exclusion of cryptos from both the financial arrangements laws and GST rules. However, the tax authority prefers cryptocurrency-related services, mining, and exchange services, for example, to be under the prevailing GST and income tax rules.

 

Bank of Canada still considering the introduction of a digital currency

The Bank of Canada is not brushing away the possibility of introducing a digital currency if people start adopting private cryptos on a mass scale and start turning into cashless societies.

While speaking at FinTech RDV 2020 in Montreal, Bank of Canada Deputy Governor Tim Lane pointed out that even though there is “not a compelling case” for a central bank digital currency (CBDC), still, a working model may be introduced in the future. In this regard, the Bank intends to discuss the idea with several interested parties who are willing to develop a central bank digital currency.

“The Bank of Canada would design it to provide the benefits of cash—safe, easy to access, private and a good store of value—but in a digital version that consumers could use to buy things electronically online or in person at a shop.”

The Bank perceives private cryptos as likely threats to the Canadian dollar. Lane further stated that: “If one or more alternative digital currencies threatened to become used widely as an alternative to the Canadian dollar, then a central bank-issued digital currency could be used to defend monetary sovereignty.”

Private sector initiatives

MoneyGram receives a contribution of around $11.3 million from Ripple Labs

As per the latest filings with the Securities and Exchange Commission (SEC), money transmission network MoneyGram has been funded approximately $11.3 million by the blockchain-based real-time gross settlement platform provider Ripple Labs. MoneyGram has been associated with Ripple for a while. Both firms have entered into a collaboration in January 2018, with an objective of integrating XRP into its payment system.

MoneyGram revealed that it was funded by Ripple twice in as many quarters. In Q4 2019, MoneyGram was awarded $8.90 million. Likewise, the firm received $2.40 million in 3Q 2019. During the fourth-quarter, MoneyGram generated revenue of $323.70 million.

“MoneyGram continued to expand its strategic partnership with Ripple as the first money transfer company to scale the use of blockchain capabilities.”

 

Russia’s wealthiest man plans to launch a blockchain-powered trading platform

Vladimir Potanin, officially the richest man in Russia, is moving forward with his plans to launch a blockchain-powered trading platform for industrial assets and commodities. The billionaire’s project, named Atomyze, has been rolled out in trial mode. Potanin’s mining and smelting company Nornickel will be the first firm to use the platform for issuing tokens. The platform has been structured for quick transactions, facilitating surplus inventory trading, and removal of red tape that is usually associated with communication between clients and enterprises.

Atomyze is based on IBM’s Hyperledger Fabric blockchain technology, and Nornickel’s partners Trafigura, Traxys, and Umicore have been invited to take part in piloting of the platform.

In the months ahead, according to Potanin, the platform could be used to tokenize other services and commodities associated with his businesses. The industrialist believes that crypto tokens will ultimately represent one-fifth of all sales of Nornickel, the world’s largest producer of refined nickel and palladium.

Initially, Nornickel intends to trial tokens backed by palladium, copper, and cobalt reserves, with the total expected token issuance in the initial year to hit a maximum of 10% of overall sales volume. Through the platform, tokens pegged to metals can be transacted for physical supplies.

Disclaimer: Any financial trading analysis offered here is our opinion and is not intended as advice or direction for investors. We cannot guarantee the success of any trades made as a consequence of this article, and we encourage traders to incorporate a strong money management strategy to limit losses when they enter the markets. Please use this article as part of your own research before formulating strategies prior to trading.

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Andrew Wright

Prior to founding tradersasset.com in 2014, Andrew worked as a proprietary trader, then as a market maker. As a market maker, he traded options in over 100 stocks, he then began trading currency pairs in 2013. Andrew still actively trades both, and prides himself on educating and informing traders on the benefits of both Binary Options and Forex.


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