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EU Policymakers Vote for Blockchain Use to Fight Tax Evasion, Crypto Asset Non-Taxation

by Blockchain NewsOctober 5, 2022

On Tuesday, the members of the European Parliament (MEPs) voted in favour of a resolution that calls for the use of blockchain technology to fight tax evasion and urges member states to coordinate more on the taxing of crypto assets.

The resolution, drafted by Lídia Pereira (a member of the European Parliament), was adopted in Parliament’s plenary session on Tuesday with 566 votes in favour, 7 votes against, and 47 abstentions.

The resolution sets out a framework through which both EU regulators and the member states can achieve the goals of uniformly taxing crypto assets and using blockchain in taxation.

However, the proposal calls for both a clear definition of crypto assets and what would constitute a taxable event. Certainly, a taxable event is any action or transaction that may result in taxes owed to the government. Nevertheless, the recommendation calls for the taxation of crypto assets to be fair, transparent, and effective. It also invites authorities to consider a simplified tax treatment for occasional/small traders and small transactions.

Regarding a taxable event, the proposal considers converting a crypto asset into a fiat currency as a more appropriate choice. It identifies blockchain as one of the major instruments that national administrations can use to facilitate efficient tax collection.

According to the resolution, blockchain’s unique features could offer a new way to automate tax collection, fight corruption, and better identify ownership of tangible and intangible assets, thus allowing for better taxing of mobile taxpayers.

The proposal calls on the EU regulators and member states to better integrate the use of blockchain into different programmes dealing with taxation and cooperation in the field. Member states should also enhance efforts to reform their tax authorities through their modernization efforts, the proposal further urged.

In short, as cryptocurrencies gain more mainstream attraction, it is not a surprise that regulation efforts emerge. Regulators, such as the EU, the IRS, and other agencies, nowadays expect taxpayers and businesses to pay regular capital gains tax on their crypto earnings. This implies that concrete regulations on digital assets are evolving rapidly.

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Tagged : Blockchain / Crypto / DIGITALASSET / Eu / PARLIEMENT / Regulation / Tax

ECB to Warn Countries in the Eurozone about Crypto Regulation

by Blockchain NewsJuly 5, 2022

The European Central Bank is reportedly on track to issue warnings to national authorities within the Eurozone about individual handling of the crypto ecosystem.

The European Commission, Parliament, and Council trilogy have agreed on the comprehensive cryptocurrency framework, Markets in Crypto Assets (MiCA), and a whole new set of concerns has been pointed out by the ECB.

This concern stems from the likelihood of national regulators within the Eurozone formulating and implementing a make-shift law to guide the interactions with the nascent asset class in the interim. While MiCA has been given the green light, its passage into law is scheduled for 2023, with implementation billed to commence 18 months after that.

That time is a very long one for most countries who may feel the urgency to protect their consumers and investing public.

“It makes sense that the ECB would want to prevent a collection of national laws on cryptocurrencies. For one thing, it could lead to operators shopping for favourable jurisdictions. Beyond that, it will create confusion for multinational operators and create an uneven playing field within the EU. On the other hand, MiCA is so very far away. That it has come so far is a positive sign. However, eighteen months is an eternity in the crypto space,” said Richard Gardner, CEO of Modulus.

The cryptocurrency ecosystem has witnessed many upheavals this year with the hacking of Crypto.com, the collapse of Terraform Labs LUNA and UST stablecoins, and the liquidations of Three Arrows Capital amongst others. Gardner noted that countries want answers to what will happen to investors who can be affected by the ongoing turmoil in the space, adding that he does not think countries will be waiting 18 months to get such answers.

In the ECB’s argument, only a unified implementation of MiCA will bring about the intended result of protecting investors and fueling growth across the board.

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Tagged : Bank / Crypto / Eu / EUROZONE / MICA / Regulation

Coinbase Plans Expansion into Europe amid Market Downturn

by Blockchain NewsJuly 4, 2022

Nasdaq-listed cryptocurrency exchange Coinbase Global Inc has announced its plans to expand its operations in the European Union and the United Kingdom despite the ongoing market downturn.

According to an update shared by Nana Murugesan (VP of Business Development and International), and Tom Duff Gordon (VP of International Policy), the plan to expand its reach in the EU aligns with its overall goal of powering economic freedom through cryptocurrencies across the board.

The executives outlined that the company currently has a presence in some key economies, including the UK, Ireland, and Germany. They also unveiled plans that the exchange is in the process of expanding in France, Italy, Spain, and the Netherlands. In a bid to achieve these moves of expansion, they noted that CEO, Brian Armstrong as well as some members of the Coinbase executives are in the UK talking to policymakers.

The exchange commended the landmark agreement on Markets in Crypto Assets (MiCA) reached by the key EU bodies on July 30. According to Murugesan and Gordon, the regulatory clarity will help the exchange to build the complete suite of its products in the region.

“The EU is setting measured regulatory standards for crypto assets, which should provide renewed impetus for other jurisdictions to reflect on their own approaches to regulation and Travel Rule implementation,” the duo wrote in the blog post, “During market downturns, the temptation can be to shy away from international expansion. We first entered the UK and EU during the bear market in 2015, a move that paid off significantly during the bull run a few years from then. We’ll keep building around the world, and doing everything we can to grow the crypto-economy.”

While Coinbase exchange outlined its current investments in the region including Qredo and Euler, it said its commitment to building a functional landscape in the EU and UK will be comprehensive across the bloc.

The plans for expansion are one of Coinbase’s first attempts to shrug off the effect of the ongoing market onslaught which pushed it to lay off 18% of its global workforce back in June.

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Tagged : Coinbase / Eu / Expansion / Industry / UK

EU Partially Agrees to Establishes Anti-Money Laundering Authority

by Blockchain NewsJuly 1, 2022

The European Union through the Council of the EU has agreed on partial terms to establish an Anti-Money Laundering (AML) body that will be named the Anti-Money Laundering Authority (AMLA).

The establishment of this new body will be to boost the efficient functioning of the Anti-Money Laundering and Countering the Financing of Terrorism (AML/CTF) framework of the Union. The challenge of money laundering is a prevalent menace in all countries today. Despite the proactive role being played by regulators across the board, cybercriminals are notably advancing in their approach by the way.

While it may be hard to curb the activities of these cybercriminals individually, safeguards can be put in place amongst financial services providers to block all possible loopholes being exploited by money launderers and terrorist financiers. The emergence of the AMLA will be targeting creating avenues by which institutions it oversees are AML-proof in all regards.

“Given the cross-border nature of crime, the new Authority is expected to make a strong and useful contribution in fighting anti-money laundering and the financing of terrorism. Among other tasks, it will contribute to the harmonisation and coordination of supervisory practices in the financial and non-financial sectors, the direct supervision of high-risk and cross-border financial entities and the coordination of financial intelligence units,” the press release from the Council reads.

AMLA will be given supervisory authority over a wide range of financial institutions and startups in the digital currency ecosystem, provided they are considered to be risky.

“It also entrusts the Authority to supervise up to 40 groups and entities – at least in the first selection process – and to ensure a complete coverage of the internal market under its supervision. More powers are also given to the general board in the governance of AMLA,” the Council detailed.

The initial definitions of the responsibilities of the AMLA is partial and the seat of governance has not been fully agreed upon. The AMLA will help in enforcing the AML aspects of Markets in crypto Assets (MiCA) when the bill is finally passed.

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Tagged : Aml / AMLA / Eu / Regulation

EU Plans to Bar Interest Payments on Deposits in Stablecoins

by Blockchain NewsJune 28, 2022

Europeans and the entire digital currency ecosystem have been potentially awaiting the Markets in Crypto Assets (MiCA) bill, which has been projected to be passed before the end of the year.

With a series of forecasts out in the open, Patrick Hansen, the head of Strategy at Decentralized Finance (DeFi) startup Unstoppable Finance, said the expected bill could come as early as this month’s ending.

Taking to Twitter to share a series of updates concerning the anticipated crypto markets bill billed to be the most comprehensive to date, Hansen said the last political trilogy meeting needed to pass the bill is set to take place on June 30. This is when the EU institutions (Council/Parliament/Commission) will be meeting under one roof.

While most issues have already been finalized, a few are still left hanging. One of these is related to the classification of Non-Fungible Tokens (NFTs) and how they are regulated within the region.

Hansen noted that the European Commission wants to add NFTs as a component of MiCA but that the Council and Parliament are initially against it, but are now more likely to make a compromise. Should NFTs be a part of MiCA, service providers like OpenSea, and Rarible or marketplaces operating in the region will be required to obtain suitable licenses.

The Deal About Stablecoins

According to the update shared, the major concerns with respect to stablecoins in the bill are already finalized and what applies to regular fiat-backed stablecoins is what will bind their algorithmic counterparts.

While there will be high regulatory requirements for issuers of both EMT (e-money-tokens) and ARTs (asset-referenced-tokens), the bill will ban Crypto Service Asset Providers from charging interest rates on stablecoin deposits. Unlike what many have also suggested, Bitcoin will not be banned in the region, affirming the earlier resolution not to ban Proof-of-Work (PoW) mining.

The regulatory framework being defined by MiCA is bound to be the most comprehensive in the world, and experts predict that it may guide other nations, including the United States, in formulating a law to govern the digital currency ecosystem.

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Tagged : Eu / European Union / MICA / NFT / Regulation / Stablecoin

European Union Close in Agreeing on Crypto Regulations – Bloomberg

by Blockchain NewsJune 11, 2022

As the clamor for crypto regulations has continued to intensify, the European Union (EU) is close to agreeing on a comprehensive regulation that will govern the nascent digital currency ecosystem.

The news was broken by Bloomberg claiming to draw inference from sources familiar with the discussions between the 27 member states.

Per the Bloomberg report, the EU member states, currently chaired by France, are currently disagreeing on how to approach certain aspects of the Market In Crypto Assets (MiCA) bill. Some of the aspects that are highly contentious include how to incorporate Non-Fungible Tokens (NFTs) into MiCA, avenues to regulate stablecoins, and how to supervise crypto assets service providers operating within the region.

The sources affirmed that EU negotiators are considering placing a ceiling on stablecoin transactions, a move that will largely prevent the excessive use of these asset types as legal tender within the bloc. The capped transactions will particularly be applied to stablecoins that are not backed by the Euro.

As the sources confirmed, the member states are currently close to agreeing on these gray areas, and something meaningful may come up in the next meetings scheduled for June 14 and June 30.

Further complications that may impact the ongoing negotiations borders significantly on the subject of crypto mining and the impact of the supposedly excessive energy consumption. The EU at a time wanted to restrict Proof-of-Work (PoW) mining, the consensus that is being used by Bitcoin miners to validate transactions.

The push for this ban was rejected by the EU Parliament Committee back in March, a move that showed the entire regulatory proposal in MiCA is not primarily centered on cutting back the current status quo in the industry. With the broader industry anticipating the MiCA bill this year, the current reports are an indication that there is a green light at the end of the tunnel.

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Tagged : Bloomberg / Cryptocurrency / Eu / MICA / Regulation

European Crypto Industry Leaders Ramps up Efforts to Influence EU Regulatory Crypto Policy

by Blockchain NewsApril 20, 2022

According to Reuters, the European Union is working to regulate the cryptocurrency industry, advocating for relevant cryptocurrency exchange companies to disclose relevant details. Still, it has been rejected by more than 40 cryptocurrency business leaders.

In a letter to 27 EU finance ministers dated April 13, cryptocurrency-related companies pointed out that EU regulation should not go beyond the rules set by the global Financial Action Task Force (FATF), according to Reuters.

FATF stands for The Financial Action Task Force, which is the global money laundering and terrorist financing watchdog. The inter-governmental body sets international standards that aim to prevent these illegal activities and the harm they cause to society. As a policy-making body, the FATF works to generate the necessary political will to bring about national legislative and regulatory reforms in these areas.

U.S.-listed cryptocurrency exchange Coinbase strongly opposes the rules that crypto companies collect information on transactions related to cryptocurrencies.

A total of 46 European crypto industry leaders and organisations wrote in a letter to the EU:

“The proposals will put every digital asset owner at risk” by leading to public disclosure of transaction details and wallet addresses. This would reduce crypto holders’ privacy and safety.”

In the letter, cryptocurrency-related leaders also advocated that the EU should repeal the requirement for decentralised projects, including decentralised finance, or “DeFi,” to register as legal entities.

The UK announced on Monday to accept stablecoins as a valid form of payment and has set plans to make Britain a global hub for crypto-asset technology and investment.

As reported by blockchain.News on April 11, The European Union Council has imposed another round of sanctions on Russia with an extended ban on cryptocurrency-focused transactions for already blacklisted Russian individuals and their relatives.

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Tagged : Bitcoin / Blockchain / Crypto / Eu / Regulation

EU Parliament Committee Rejects Proposal to Limit Proof-of-Work Crypto

by Blockchain NewsMarch 15, 2022

The European Parliament’s Economic and Monetary Affairs Committee voted Monday, a move that quashed the ban on the popular cryptocurrency Bitcoin across the European Union (EU). The committee voted against the ban on Proof-of-Work mechanisms underlying major cryptocurrencies like Bitcoin and Ethereum.

The committee decided to keep out the rule of the proposed Markets in Crypto Assets (MiCA) framework, the EU’s comprehensive regulatory package for governing digital assets.

The rule, which was introduced to the draft last week, aimed to limit the use of cryptocurrencies powered by an energy-intensive computing process known as proof-of-work across the EU’s 27 member states. The proposal was eventually repealed as a result of widespread opposition from the sector.

Dr Stefan Berger, EU parliamentarian in charge of the MiCA legislative framework, talked about the announcement on Twitter social media platform: “First stage win at #MiCA in committee! By accepting my proposal, members have paved the way for future-oriented crypto regulation. It is now a matter of accepting the report as a whole in the final vote & sending out a strong signal for innovation.”

However, Dr. Berger stated that the controversial paragraph has been withdrawn, but that a final decision had not yet been reached.

Switching to Proof of Stake

The use of Proof-of-Work (PoW) cryptocurrencies was uncertain following the draft of the European Union’s (EU) proposed legal framework for managing virtual currencies, known as the Markets in Crypto Assets (MiCA) framework.

The clause, which could have forced PoW cryptocurrencies to shift to more environmentally friendly mechanisms, failed to get the votes required in the parliament.

Major crypto assets like Bitcoin and Ethereum rely on PoW, a consensus mechanism underlying the digital assets that require a lot of energy to operate.

In recent months, the computing process has come under intense examination from legislators because of worries about the usage of energy. While the popularity of Bitcoin has grown, the controversy over its energy consumption and environmental impact has intensified.

As a result, some of the major cryptocurrencies like Ethereum and Dogecoin have shown intentions to migrate from the current Proof-of-Work (PoW) to Proof of Stake (PoS) crypto consensus mechanism. PoS refers to processing transactions and creating new blocks in a blockchain in an environment and efficient friendly manner.

However, there is still no consensus in the crypto community about the PoS model being better than PoW. Some users and well-known names in the market, like Jack Dorsey, have highlighted that the new method does not provide as much security to the network as proof of work offers. Meanwhile, there is no sign that Bitcoin, the world’s largest cryptocurrency, will migrate to the PoS system.

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Tagged : Crypto / Eu / MICA / POS / POW / Regulation

EU Ensures Russia Cannot Bypass Sanctions thorugh Crypto, Says French Finance Minister Le Maire

by Blockchain NewsMarch 3, 2022

French Finance Minister Bruno le Maire said on Wednesday that the European Union (EU) is looking for ways other than cryptocurrencies to impose EU sanctions on Russia, Reuters reported.

The EU is currently imposing economic sanctions on Russia in three situations over Moscow’s aggression against Ukraine, including freezing the assets of the Russian Central Bank and disconnecting seven Russian banks from the SWIFT financial information system.

On Sunday, the Ukrainian government urged cryptocurrency exchanges to block all transactions from Russia, which could provide a backdoor to circumvent sanctions. However, so far, most major exchanges, including Binance, Coinbase, and others, have refused to block Russian accounts on a large scale.

Le Maire told a news conference after talks with EU finance ministers:

“We are taking measures, in particular on cryptocurrencies or crypto assets which should not be used to circumvent the financial sanctions decided upon by the 27 EU countries,”

Le Maire said the current sanctions on the Russian financial system are very effective, weakening the ability of the Russian central bank to protect the Ruble.

The EU is a political and economic union jointly established by many European countries. It now has 27 member states and is the third-largest economic entity globally. Germany and France are the two core member states of the European Union.

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Tagged : Bitcoin / Blockchain / BRUNO LE MAIRE / Crypto / Eu / Politics / Russia

US, EU Regulators Vow to Remove Russian Banks from SWIFT Network

by Blockchain NewsFebruary 28, 2022

Perhaps, one might say the attack on Ukraine by Russian forces is not well coordinated as leaders worldwide continue to announce sanctions on key individuals and institutions in Russia.

One of the latest sanctions seeks to ban by selecting Russian banks from the Society for Worldwide Interbank Financial Telecommunication (SWIFT), a move announced in a joint statement from the leaders of the European Commission, France, Germany, Italy, the United Kingdom, Canada, and the United States.

SWIFT is an inter-continent payment network that helps facilitate payment settlements made across the border. It remains a well-regulated and trusted means of moving money used in international trades and for key remittance purposes. Following the Russian aggression on Ukraine, the leaders mentioned above have chosen to cut Russia off these networks to impose economic strain that will force Vladimir Putin’s forces to call off the hostility.

“We stand with the Ukrainian government and the Ukrainian people in their heroic efforts to resist Russia’s invasion. Russia’s war represents an assault on fundamental international rules and norms that have prevailed since the Second World War, which we are committed to defending. We will hold Russia to account and collectively ensure that this war is a strategic failure for Putin,” the announcement reads.

Besides severing away from SWIFT, the world leaders promised to “commit to imposing restrictive measures that will prevent the Russian Central Bank from deploying its international reserves in ways that undermine the impact of our sanctions.”

Finding Solace in Digital Currencies

With the broader global community seemingly against Russia, the question remains whether the country will take solace in embracing digital currencies as a way to boycott these sanctions.

Recalling the Russian Central Bank that has been pulling its weight to ban digital currencies, a move similar to the push by the People’s Bank of China last year. While the agitation to ban Bitcoin came earlier this year, the ongoing economic severance might serve as an avenue for the apex bank to rescind its position very soon. These nascent asset classes may be one of the most accessible options for Russians to transact with the global economy.

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Tagged : Eu / Politics / Regulations / Swift