CRYPTO INDEX SERIES
CIS Gazette 26/Oct/2020
A summary of the weeks news & events in the Crypto/Blockchain world
Witnessing a Global Infrastructure Setup for Cryptocurrencies for Mass Adoption?
Earlier last week, the international payment platform PayPal announced that the PayPal account can be used for buying and selling Bitcoin and other virtual currencies. Those virtual coins could be used to buy things from 26 million sellers that accept PayPal as well. PayPal plans to roll out buying options in the US over the next few weeks, with the full rollout due early next year.
The other cryptocurrencies to be added in the first release will be Ethereum, Litecoin, and Bitcoin Cash (a spin-off from Bitcoin). As the Company specified all will be able to be stored "directly within the PayPal digital wallet".
Cryptocurrencies have remained a niche payment method, partly down to the rapid change in prices they can experience compared with traditional state-backed currencies. That has made them popular among some types of investors. PayPal said it was aiming "to increase consumer understanding and adoption of cryptocurrency". However, it has been stated that using Bitcoin to pay at ordinary merchants is not due to launch until "early 2021".(1)
The Central Bank of the Bahamas has officially launched its national digital currency. The project is designed to bring more “inclusive access to regulated payments and other financial services,” as per the Central Bank.
CBDCs have been a hot topic this year; China, for instance, appears to be close to launching its digital yuan, which in recent days has seen its biggest public trial. Others, like the U.S., Russia and the European Union are looking into their respective CBDC launches.
The first phase of the Bahamas rollout sees private-sector players such as banks and credit unions readying compliance checks for personal and enterprise wallets to support the sand dollar. The digital wallets will be secured with multi-factor authentication security and will be mobile-based, servicing 90% of the population with smartphones.
The Sand Dollar is backed 1:1 to the Bahamian dollar (BSD), which, in turn, is pegged to the U.S. dollar.(2)
Many countries have already begun exploring the introduction of their own digital currency, and this trend is not going to slow down. Canada is reportedly taking the idea of a central bank digital currency (CBDC) more seriously, and its interest shows how far the idea has come – and how legitimate it is.
Canada’s central bank, the Bank of Canada, is reportedly looking to establish a monitoring framework for money and payments and the contingency planning for a central bank digital currency (CBDC). This is a clear indication that the Bank of Canada is prepared to introduce a CBDC, should its research program determine adequate feasibility. In addition to Canada, the US, the UK, China, and a number of other countries – as well as the European Central Bank – are also exploring the possibility of a CBDC, showing that it is legitimate global interest in taking currency to the next level. Sweden, for example, is planning on becoming a completely cashless society with the help of digital currency in the near future and has already started working toward that goal. (3)
The OECD has released a new report on countries' tax rules for virtual currencies, alongside an announcement that the Common Reporting Standard will be expanded next year to newly covered virtual currency assets. The report and announcement indicate that crypto assets will be a major area of focus for the OECD, tax authorities, and governments from next year onwards. The Common Reporting Standard (CRS) presently provides for the automatic exchange of information on taxpayers' financial accounts. The expansion of the CRS to virtual currencies would better equip tax agencies to tackle tax non-compliance and make tax enforcement more feasible.
The OECD's new report brings together for the first time information from participating countries – received in response to a questionnaire – on their approaches to virtual currency tax issues. Releasing the report, the OECD said, for a number of reasons, it is not possible to provide a comprehensive overview of each country's tax treatment of virtual currencies, as many countries do not have specific guidance for crypto assets or the guidance that they have released is too narrow in scope.
The report notes that only a few of the respondent countries consider virtual currencies to be similar to currency for tax purposes: Belgium, Cote d'Ivoire, Italy, and Poland. The report notes also that just a handful of states subject crypto asset holdings to property taxes, transfer taxes, wealth taxes, or estate taxes. The report highlights that the VAT treatment of virtual currencies is more consistent across countries than income taxes, with most countries mirroring the approach adopted in the European Union.(4)
Bitcoin Romania company, operating in the Romanian local market, started franchise transactions for ATMs with crypto currencies. Bitcoin Romania, a cryptocurrency trading platform operating in Romania, announced that a franchise has been created for ATMs that can be used to deposit or withdraw cryptocurrencies. Having launched its first crypto ATM in Bucharest in 2014, stated that they will expand the cryptocurrency ATM network, which they have been developing, with new investors since 2019. In the published article, it was also stated that the number of crypto money ATMs is currently 20 in total, is planned to reach 100 by the end of the year.
While Bitcoin Romania has 20 ATMs available, 6 of them are ATMs established with the partnership system. In addition, Bitcoin ATMs support not only Bitcoin but also other cryptocurrencies such as Ethereum, Litecoin, Bitcoin Cash. It has been stated that buying and selling transactions to be made in Bitcoin ATMs will usually take more than a minute and Bitcoin ATMs located in a place where people can be more functional.(5)
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