Several regions across the globe have their own rules and regulations about cryptocurrencies: some love it, some hate it and some are still on the fence. The latest focus point was on Russia, a country known to be in two minds about Bitcoin.
The last few weeks have been chaotic in the Kremlin due to a massive cabinet reshuffle. This also resulted in former Prime Minister Dmitry Medvedev being replaced by Mikhail Mishustin. The new PM is a former tax man and has made some strong comments about Bitcoin.
Mishustin’s appointment was seen as a step taken by Vladimir Putin to ensure an airtight economy. This was the reason why Bitcoin and the cryptocurrency market was of such key importance to Mishustin. He had earlier served as the director of the Russian Internal Revenue Services with a keen eye to stop financial fraud.
In a bid to make cryptocurrency transactions safer, the new Prime Minister wants all crypto-related operations to be taxed. This step was proposed to keep a close watch on the ways in which digital assets are spent. Mishustin claimed that it was imperative such taxation laws were implemented in regions where cryptocurrencies were used.
He believed that such a step would make it easier to access any economic consequences using digital assets. The government official made these comments just a day after he replaced his former titleholder.
Cracking down on Bitcoin has always been difficult because of its decentralized nature but taxing it has been one of the few ways to keep tabs on it. Even France imposed taxes on Bitcoin and other cryptocurrency expenditures. Officials involved in the cryptocurrency field in Russia were still doubtful about how the new rules will affect the industry. Anti Danilevski, the founder of the Kick Ecosystem stated:
“I think the arrival of new Prime Minister Mikhail Mishustin increases the likelihood of Russia putting further protections in place for crypto (investors) and enterprises. What they do now is critical.”
The Kick founder believed that taxing digital assets makes it more legitimate as it invites the confidence of institutional investors. The barrier for mainstream players has always been regulatory uncertainty and Russia seems to be on the verge of removing that.
Die-hard fans of crypto will take the latest news with a pinch of salt because of the government’s involvement. According to them, the government was scared of assets that did not require a central bank and flew right above them.
The new Russia Prime Minister had a different set of thought processes. Mishustin claimed that the underlying blockchain technology was useful but it still threatened the working fabric of several other industries. Speaking during a recent interview he said:
“These digital platforms offer a new efficiency, but this is a threat to entire sectors of the economy. Airbnb is great, but it is a threat to hotels. What will happen to the automotive market due to the emergence of platforms and unmanned vehicles, for instance…nobody knows.”
As per other reports, South Korea has also joined the ‘crypto tax’ bandwagon with Russia. The Korean Finance Ministry is reportedly on the verge of creating a plan that would see cryptocurrency being taxed like regular assets. Some have speculated that the rate would be about 20 percent, but nothing has been confirmed as of yet.
At a time when political bodies of countries were considering cryptocurrencies as assets, followers of the industry are in awe of how far it has come. From being a niche product to being discussed in parliament halls, the crypto community was confident that they were here to stay.