The US is tightening the reporting requirement for crypto transactions and India is planning a BTC law. There is also news from Russia and Barbados.
US infrastructure law contains controversial crypto paragraphs …
Joe Biden’s massive infrastructure law is pushing the US crypto lobby to the barricades. Because the prestigious investment package provides for the reporting rules for crypto transactions to be tightened significantly from 2024. All crypto brokers would then be required to report transactions worth more than 10,000 US dollars to the tax authorities. Critics complain that the term broker is not outlined clearly enough in the legal text. As a result, all entities involved in the completion of a transaction could be affected by the reporting requirement. In addition to the Bitcoin exchanges, there are also mining companies as well as wallet and other blockchain developers. Such companies, however, have no access to the transaction data required for reporting. Because of these compliance difficulties, the critics fear an outflow of innovation from the USA. They are calling for an addition to the legal text that should define the term broker more precisely. It wasn’t until Thursday, November 18, that MPs Patrick McHenry and Tim Ryan tabled a bill on the matter.
… mandatory reporting for transactions of US $ 10,000 or more?
In addition to the broadly discussed broker regulation, the Infrastructure Act from 2024 also provides for crypto transactions worth more than 10,000 US dollars to be treated as cash payments to the same extent. Because with the latter, recipients are legally required to transmit personal data to the sender to the government. In addition to the name, this also includes the social security number and address. If this regulation is extended to transactions with digital assets, there is also a risk of considerable compliance hurdles. The question that arises here is whether old regulations can be transferred 1: 1 to new financial technologies. With both of the planned changes, however, it is noteworthy that the US authorities are not taking their time to introduce them until 2024 without good reason. This enables them to become aware of potential compliance obstacles. So there is a need for action right now for US crypto interest groups.
India plans crypto law, premier calls for more international cooperation
India’s Prime Minister Narenda Mohdi has stood up at a speech made strong on Thursday for more international cooperation on crypto issues. As part of the technology summit Sydney Dialogue Mohdi warned that Bitcoin and Co. could otherwise fall into the wrong hands. The world is therefore at a crossroads, it is important to sound out whether cryptocurrencies will be a means for “cooperation or conflict, coercion or freedom of choice, domination or development, oppression or possibilities”. India, meanwhile, is preparing its long-awaited crypto law. The reported on Wednesday Econmic Times of Indiathat cryptocurrencies could not be approved as a means of payment, but as an investment asset. The law also wants to prohibit Bitcoin exchanges from actively acquiring new customers. The proposed regulation is a consequence of an ongoing debate about crypto advertising in the country.
Russia’s central bank is considering transaction fees for CBDCs
The first tests for the digital ruble are scheduled to start in early 2022. In line with the approaching start date, the Russian central bank has now announced further details on its CBDC project. The bank is planning to introduce transaction fees. However, these should be lower than with bank transfers. So reported the Russian news portal Prime citing Kiril Pronin, Head of Financial Technologies at the Central Bank. Meanwhile, Pronins boss Elvira Nabiullina said in a speech to the State Duma on Thursday that her house sees CBDCs as the preferred alternative to crypto currencies. The head of the Russian central bank is of the opinion that no responsible state should promote the spread of Bitcoin and Co.
SEC puts the bolt before Bitcoin Spot ETFs
The SEC continues to pursue a dual strategy with Bitcoin ETFs. Because while the US stock exchange supervisory authority allows funds based on Bitcoin futures to trade, it still throws off applications for spot ETFs that are directly linked to the Bitcoin price. The financial services provider VanEck recently felt this. On November 12, the SEC finally denied its blessing for the company’s planned spot ETF. A futures-based BTC ETF from the same company began trading on Tuesday on the Chicago Board Options Exchange (CBOE). A number of ETF applications are still waiting for the final verdict in the US.
Barbados is the first country in the world to work on its own virtual embassy. The Caribbean state is planning to cooperate with several Metaverse companies for this purpose. The Ministry of Foreign Affairs announced the conclusion of a contract with Decentraland on November 14th. The crypto company is developing a virtual reality platform based on Ethereum that aims to enable trading in virtual properties. Barbados named Somnium Space and SuperWorld as further partners. The island state is aiming to gain a foothold in several digital worlds. The message, which is due to open its virtual doors in January 2022, could therefore only be the beginning. It is noteworthy that a state recognizes virtual land as part of its own national territory for the first time.