All over the world, lawmakers and regulators are finally starting to take cryptocurrency seriously. It’s not hard to see why. Cryptocurrency is changing how traditional financial institutions operate, and even central banks are starting to see the advantages of a decentralized, blockchain-based approach to transactions. As a result, the rules of money are rapidly changing at the highest levels of government.
Let’s take a look at three major changes in cryptocurrency laws that will have big impacts in 2020.
1. French authorities rule that crypto-to-crypto trades are not taxable events. In many countries, such as the U.S., even moving your own bitcoin from one wallet address to another can be considered a “taxable event” under the current rules. This nonsensical interpretation also extends to trading one crypto token for another, such as trading $100 of ETH for an equal value of LTC, for instance. It’s the equivalent of arguing that two people exchanging “Secret Santa” gifts an an office holiday party should have to pay a tax for transferring ownership of two equivalently priced items. Thankfully, the French Minister of Economy, Bruno Le Maire, said in late 2019 that France would no longer consider crypto-to-crypto trades to be taxable events, although capital gains taxes would still apply when crypto is exchanged for fiat.
2. German banks can now sell cryptocurrency. Under a new law currently being considered by the Bundestag, German banks may soon have the ability to directly buy and sell cryptocurrency to their customers. If passed, the bill would also allow banks to act as custodial agents for crypto accounts, effectively treating crypto deposits like foriegn currency accounts. The bill is expected to go before lawmakers later this year.
3. Iran now actively encouraging cryptocurrency mining farms. For decades, Iran’s economy has been crippled by U.S.-backed sanctions that severely limit the country’s access to international banking and global trade networks. Cryptocurrency has become a viable tool for avoiding some of those sanctions, resulting in the Iranian government’s recent decision to embrace the new technology. Iran is currently issuing crypto-mining licences to tech startups in the country, and is even offering subsidized electricity to attract new investors. Ironically, U.S.-based mining firms are said to be among those bidding for the new crypto-mining licences.