Amidst Libra Controversies, France Calls for EU-Wide Cryptocurrency Regulation
The French government continues to be stringent with cryptocurrencies and the primary underlying technology, Blockchain. The country’s economy minister, Bruno Le Maire, urged on the European Union to establish a common set of regulatory parameters for cryptocurrencies in order to counteract risks posed by the transaction of digital assets.
Only recently, Facebook’s proposed cryptocurrency project, Libra, has encountered a Gallic dismissal courtesy of French economy minister, Bruno Le Maire. He opined that Libra, at its current stage, poises multiple threats in terms of financial transactions, which must be analyzed and regulated before it takes the shape of a public digital currency. And now, according to another report, he has announced that tax on crypto-to-crypto trades will be exempted, whereas tax will only be imposed when investors ‘cash out’ by exchanging their cryptocurrency for the “traditional” one.
Le Maire said, “We believe that the moment the gains are converted into traditional money is the right time to assess tax.” He also mentioned that value-added tax (VAT) would only be assessed when a user purchases goods or services in exchange for cryptocurrency. This particular approach, he believes, is likely to help track transactions which represents one of the most common challenges related to crypto-to-crypto trading.
Changpeng Zhao, CEO of the crypto trading exchange, Binance, expressed his grievances on Twitter with regards to the French government’s constant backlashes against Libra. He also shares his gratitude for the government for “not taxing crypto-to-crypto transactions.” He believes this will give rise to more space for crypto exchanges to flourish.
Today, blockchain and cryptocurrencies represent a neoteric vibrant industry in France. Yet, surprisingly, no consensus has been formed to regulate whether current financial regulations would be applicable on digital currencies or a new system should be devised. Despite the active progress that France is making in studying the cryptocurrency space in order to establish a regulatory regime, statements from multiple quarters of the government prove that there is a real enthusiasm amongst the country’s population for the fundamental blockchain technology. It’s yet to be seen whether France turns into a new crypto haven in the upcoming days; however, the country has demonstrated quite a positive growing attitude toward cryptocurrencies and ICOs over the last one year.
Contrarily, in the United States, cryptocurrency taxation entirely remains on the opposite end of this spectrum. While the revenue service of the U.S. federal government, IRS, has recently sent a wave of notices informing cryptocurrency investors and traders of the necessary steps that they need to abide by to pay their taxes, U.S. Congress members, on the other hand, have requested IRS to further clarify its stance on the taxation of digital currencies. Earlier this year, 21 Congress members petitioned the IRS to provide them with updated guidance for tax-assessment on cryptocurrencies.