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Taxation of Digital Assets: How Public Policy can define the Future of Blockchain

Taxation of Digital Assets: How Public Policy can define the Future of Blockchain

To begin, it is critical to stress that people will not be taxed for purchasing or keeping Bitcoin under French law.

Individuals are taxed on bitcoin sales and are required to declare the transaction if they make a profit or gain. This implies that long-term cryptocurrency holders will not be required to record their profits or income on a yearly basis, at least not until they sell their bitcoin holdings.

Our new administration in France has chosen to tax capital gains uniformly, ensuring that everyone pays the same rate regardless of their income throughout the fiscal year. Indeed, cryptocurrency is a taxed asset class under this legislation, subject to a 12.8 percent income tax and a 17.2 percent extra social levy. To put it another way, cryptocurrencies are taxed the moment they are transformed into a government-backed currency (USD, EUR, CNY, etc.)

In these words, trading one cryptocurrency for another without converting to a real currency does not result in the imposition of an asset tax. In short, the legislation may change in the future, but for the time being, any income created by crypto will be recognized as a capital gain and so taxed similarly to publicly traded equities. It's also worth noting that, for the fiscal year 2020, you will not be required to declare revenue from security tokens, non-fungible tokens, and stablecoins.

Additionally, if the total amount of the profits created does not exceed $ 304, you will not be required to report your cryptocurrency earnings for the year in which the earnings were earned on the cryptocurrency.

Why Blockchain is here to last

Transparency via decentralization is a crucial characteristic of blockchain-based systems, enabling all participants to access and verify data. Some citizen services might benefit from a blockchain technology that allows for an independent verification.  

Many countries are now exploring with blockchain-based land registers, which allow different parties to securely maintain copies of the registration. This approach may be useful in resolving property disputes fast or preventing them completely.

When individuals and governments exchange records, the risk of mistrust is reduced.

The advantages provided by technology are much too compelling to be overlooked. The security component of the blockchain is attractive since no blockchain systems have indeed been hacked or infiltrated. Another reason for blockchain's security is that it is based on cryptography, with each block protected by a unique private key. Due to the obvious cryptographic private keys, the blockchain network is safe.

When a person wishes to perform a money transfer on blockchain, a key is given to use to complete the transaction between herself and the person intended to send money to.

Blockchain is a distributed ledger that has a wide range of uses. To gain the advantages of this ever-evolving technology, businesses are beginning to look for ways to incorporate blockchain into their operations, making the technology unavoidable in the near future.

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