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Argentina Regularizes and Taxes Cryptocurrency Operations

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Argentina Regularizes and Taxes Cryptocurrency Operations
Argentina Regularizes and Taxes Cryptocurrency Operations
  • Through Decree 796/2021, the government regulates crypto operations of both natural persons and companies.
  • The government claims that businesses and users will benefit from the advantages offered by digital transfers.
  • The taxes that companies and individuals will pay are VAT and income tax.

The Argentine government imposed a levy on all cryptocurrency operations, it disclosed on Wednesday. The directive for digital money was included by decree in the tax on bank credits and debits, better known as the check tax.

Presidential decree 796/2021, published in the Official Gazette, introduced changes to the Competitiveness Law, which created the check tax in 2001. The document was signed by President Alberto Fernández, the Chief of Cabinet, Juan Manzur, and the Minister of Economy, Martín Guzmán.

Argentina is one of the 10 countries globally where the use of cryptocurrencies has been adopted the fastest. Official data indicate that the Argentine market has at least 2 million open user accounts.

The Federal Administration of Public Revenues (AFIP) did not let this data pass to incorporate digital money operations to its tax source. More at this time when the government needs to increase its revenues to raise public spending and satisfy voters.

The regulations establish that “the exemptions provided for in this decree and in other regulations of a similar nature will not be applicable in those cases in which the movements of funds are linked to the purchase, sale, exchange, intermediation and / or any other operation on crypto assets, cryptocurrencies, digital currencies, or similar instruments, in the terms defined by the applicable regulations”.

On The Flipside

  • The tax was approved by the government two days after losing the legislative elections against the Argentine center-right.

The Competitiveness Law grants special powers to the government to establish total or partial exemptions to the tax on bank credits and debits when it deems it necessary.

To justify the approval of the crypto tax, the government decree indicates that due to the pandemic, the Central Bank established a new operating framework in order to extend electronic transfers.

Likewise, through Communication A 7153, it updated the National Payment System and established the so-called Transfers 3.0, which is used to make payments with transfers through standardized QR codes.

Both businesses and users will be able to benefit from the advantages offered by immediate transfers, which are not only more accessible for users, but also allow the creation of a more efficient and secure payment system.

Taxes for individuals and companies

Natural persons who obtain a commission for the purchase – sale of cryptocurrencies must pay VAT (21%). They will also pay a tax on profits related to the difference between purchase and sale (Income Tax).

If the operation is carried out in the country, the tax body will consider the income as from Argentine source. Otherwise, it will be categorized as foreign source income. In the same way, the AFIP establishes a difference between the cryptocurrencies generated (mined) in the country and those that are extracted abroad.

According to the decree, the government considers cryptocurrencies to be an asset or a personal good. Therefore, they must pay a tax when added to other assets, when they exceed the non-taxable minimum.

Exchange platforms will also have to pay two taxes. The VAT for service provision, and the Income Tax, which is derived from the commissions they charge for managing their clients’ operations.

Why You Should Care?

  • It is expected that the regularization of cryptocurrency operations in Argentina will translate into a new boost for this market in the South American country.
  • Cryptocurrencies in Argentina have served investors and other users to face the shortage of dollars and protect themselves from inflation.

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Cryptocurrency

Is stablecoin a security? Crypto Investors get rid of stablecoins: USDT suffered the most

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The market capitalization of the leading stablecoins has dropped significantly after the FTX crash. Let’s find out what this means for the market and whether it’s worth following the example of other investors and going into fiat. Is stablecoin a security?

The drama surrounding FTX seriously undermined investors’ confidence in centralized exchanges and forced them to get rid of stablecoins en masse. USDT suffered the most: according to CoinMarketCap, its supply has fallen from $67 billion to $65 billion in the last two weeks.

Because of concerns about Tether and stablecoin security reserves, users are redeeming USDT or converting it to USDC. A similar situation was observed after the collapse of Terra Luna – then within two weeks the market capitalization of the asset fell by $10 billion.

However, CTO Paolo Ardoino says that Tether was not affected by the FTX crash and users have nothing to worry about.

BUSD and DAI were also hit

USDT is not the only stable coin affected by the FTX story. For example, the circulating supply of BUSD fell from $23 billion to $22.5 billion, and DAI fell from $5.7 billion to $5.2 billion.

On the contrary, the capitalization of USDC and Pax Dollar steel blockers increased. Over the past two weeks, USDC’s supply reached $44.7 billion.

The cryptocommunity is actively discussing this on Twitter and speculating about the reasons for this growth. Some believe it may be due to USDC’s profitability and the influx of former USDT holders into the asset.

FTX collapse undermined investor confidence

The fall of the Sam Bankman-Fried empire has undermined user confidence in the cryptocurrency and led to a massive collapse in prices.

But market participants also fear that other platforms will follow FTX’s lead. So it’s no surprise that many retail investors are choosing to hold their own assets rather than hold them on centralized exchanges.

Previously, we reported that Poloniex curtailed support for stablecoins on the BNB Chain.

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U.S. authorities launch investigation into Genesis investing system

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genesis investing system

The Securities Commission of Alabama launched an investigation into the Genesis investing system. This edition of Barron’s, citing the head of the regulator, Joseph Borg.

Borg refused to elaborate on what exactly Genesis is suspected of. The newspaper said the Alabama regulator as well as agencies in several other states were investigating whether Genesis had encouraged U.S. citizens to invest in securities.

Which other regulators are in question is unclear. Borg himself has not directly stated the investigation against Genesis. Instead, he said that “if a firm serving institutional investors fails, retail depositors will be affected [as well].”

Is Genesis investing legitimate?

Genesis Global Trading has hired consultants from investment bank Moelis & Company to consider options for restructuring the business, including bankruptcy. As The New York Times has learned, the broker has not yet made any final decision and still hopes to avoid bankruptcy.

It is worth noting that Moelis & Company consultants also tried to save the bankrupt broker Voyager Digital. A Genesis spokesperson said in a media comment that the firm is still trying to find a way to resolve the issue without declaring bankruptcy.

Genesis’ problems have already affected the firm’s partners. The credit division of cryptocurrency exchange Gemeni is known to have frozen the withdrawal of client assets, citing Genesis’ difficulties. The exchange later said it was working on a solution, but did not provide details.

We previously reported that Binance is launching a reserve-proof system.

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How the SEC is trying to create conditions for money control bitcoin. What could it lead to?

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money control bitcoin

When CME Group launched the first bitcoin futures contract in 2017, Chairman Emeritus Leo Melamed said he would “tame” the major cryptocurrency. The SEC has since approved several ETFs. But as exchanges increased their supply of BTC, the community began to have questions about market manipulation. Today, it’s about money control bitcoin.

Banks want to control bitcoin. Can banks control bitcoin?

Manipulating bitcoin with ETFs will lower its price in the short term, but will help accelerate the mass adoption of the cryptocurrency by traditional market participants.

The SEC approved the first bitcoin ETF in October 2021. The ProShares Bitcoin Strategy exchange-traded fund appeared on the New York Stock Exchange on Oct. 19, a day when the fund’s shares traded nearly $1 billion.

The Bitcoin ETF is not suitable for retail investors because it gives institutional investors an advantage. A bitcoin futures ETF has “the potential for price suppression and greater volatility due to the dominance of futures.” BTC futures will appreciate relative to the spot price because of positions opened by hedge funds.

The gold standard. Who controls cryptocurrency?

It’s a common belief in the gold market that ETFs are currently outpacing prices. The same practice seems to have been adapted for the bitcoin market as well. CME Group claims that bitcoin ETFs will help investors “benefit from efficient price discovery in transparent futures markets.”

“Paper” bitcoin may change the minds of crypto skeptics

Bitcoin’s core value comes from two factors. First, BTC is truly decentralized. Second, its maximum supply is 21 million coins. However, bitcoin ETFs increase the supply of BTC by selling “paper” assets and thus affect the value of the cryptocurrency.

The threat of decentralization

Bitcoin futures ETFs can accelerate mass adoption. However, their existence runs counter to the decentralization ethic advocated by the BTC. There is concern that the BTC could be “hijacked” by hedge funds and big banks, which could end up manipulating the price.

We previously reported that Polkadot is offering money to fight cryptocurrencies.

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