Cryptocurrency regulation has emerged due to the increasing growth of the industry, thus forcing its way into acceptance and rejection in different countries around the globe. We’ve seen World leaders drumming support for the market and likewise, we’ve seen some downplaying the industry. At this stage, it’s glaring that countries are struggling to find the best way to regulate crypto.
Furthermore, the ownership rate of cryptocurrency in the world is at 3.9%, with a larger percentage having heard about it. The rate of cryptocurrency holders varies from country to country. India, USA, Russia, and Nigeria are leading the charge for the country with the highest number of cryptocurrency holders.
Additionally, it’s indeed an anointed call for countries to regulate cryptocurrency. It’s a debate every country can’t avoid or shy away from. While it is imperative to regulate cryptocurrency, we’ve seen countries lashing crypto holders with a hefty tax rate. A country like Nigeria, despite having the highest rate of cryptocurrency holders in Africa has banned crypto.
Cryptocurrency regulation is sorely the responsibility of the government. It is disappointing to see leaders and governmental agencies leveraging on that to hit the industry hard. Cryptocurrency regulation should guide the interest of investors, without threat to the country’s economy. Preventing Manipulation, Protecting Investors, allowing various choices of cryptocurrency, Educating investors and citizens about the risk of the industry, money laundering, Online fraud are reasons why the government must allow cryptocurrency regulation.
However, only a few countries are threading the path of bearing investors in mind while regulating cryptocurrency. At this stage, one ought to ask if cryptocurrency regulation is meant to enrich the government or protect investors? It should be a matter of mutuality, both sides should be protected.
Diverse Tax Rates in Different Countries
Following the trends of countries that had attempted to regulate cryptocurrency, only a few had exhibited good intentions toward cryptocurrency. India, which has the highest rate of investors in the world is yet to give a specific headlight on cryptocurrency regulation. Without having a specific guideline yet, the country through the Minister of Finance, Nirmala Sitharaman announced an outrageous 30% tax rate on crypto returns.
Notwithstanding, tax rates are part of the cryptocurrency regulations framework, but is a 30% tax rate meant to protect investors or enrich the government? The cryptocurrency regulation bill is still under draft in India, but the increasing drama surrounding it is a worrisome one. Leaving many feeling indifferent towards it, whether the bill would have the consideration of investors at heart. A 30% tax rate has no good to offer investors than to crumble their zeal towards the market.
The U.S is as well yet to have a definite framework for cryptocurrency. Quite similar to India, the IRS had stipulated guidelines on cryptocurrency taxation without a definite cryptocurrency regulation framework. The IRS refuses to accept cryptocurrency as a currency but an asset instead. This will bestow the country to tax investors from 0% – 37% based on a long-term and short-term basis.
Government gains from cryptocurrency tax
Tax rates are relatively part of cryptocurrency regulation, not a substantial part but a considerate one. Through tax rates, investors get to register with the government thus getting under the attention of the government.
Unfortunately, the government has shown little interest in protecting investors and their cryptocurrency investments. Despite not having well-tailored regulation, governments pose to gain more than investors. The world is waiting to see the structure of the proposed regulations but the tax rates are forerunners of what is to happen. The government would gain more than investors, these unfair tax rates are damaging for cryptocurrency holders.