EU leaders debate crypto rules
The struggle for the European crypto regulations MiCA (Markets in Crypto Assets) continues. Two months ago, the EU Parliament presented a draft that is now being discussed in a trialogue with the Council and the Commission. According to an unofficial letter available to BTC-ECHO, the EU Commission is now opposing a regulation that affects the prevention of money laundering and terrorist financing. The parliamentary proposal provided for a licensing ban for crypto providers from countries that are considered high-risk areas or do not levy corporate taxes. According to the Commission, however, this violates international trade rules and there are no comparable bans elsewhere. It is therefore unclear why this regulation should apply to Bitcoin and Co. of all things. On the other hand, the Commission and Parliament agree on the planned reporting obligation for all crypto transactions, which is of concern to the community. Here in the trilogue there is only disagreement about a register that is supposed to list non-compliant crypto service providers.
Treasury approves staking hold period
If the EU’s regulatory plans cause displeasure among bitcoin hodlers, the political handling of digital currencies in Germany is going in a more benevolent direction. So announced the Federal Ministry of Finance (BMF) on May 11 that the 10-year holding period for staking and lending is a thing of the past. Cryptocurrencies can therefore be resold tax-free after one year of ownership, regardless of whether they were previously used for staking or lending. The German crypto industry responded positively to the decision. It is also pleasing that the authority clearly defines Bitcoin and Co. as economic goods in its letter. This is the only way that it can be classified under German income tax law. On the other hand, however, the BMF distinguishes between active and passive staking. Anyone who operates their own staking node will therefore be considered a service provider in the future. He then has to pay commercial tax on his income.
Higher crypto taxes for India
In contrast to the German tax break, India wants to tighten the thumbscrews for Hodler. Because the Indian government is planning according to media reports an increase in the Goods and Services Tax on all crypto services. The levy, which is comparable to value-added tax, is to be raised from 18 to 28 percent. Bitcoin and Co. would thus be on a par with lotteries, horse racing tracks and other forms of gambling. It is not yet clear when the responsible government committee will debate the tax increase. According to insiders, however, the necessary preparations have already begun behind the scenes.
El Salvador buys the dip
The past week has sent the crypto market plummeting. But one person apparently didn’t let this deter him: El Salvador’s President Nayib Bukele. On May 9, the controversial leader announced on Twitter that he had bought 500 bitcoin for $15 million. His country paid an average of $30.744 per coin. In 2021, El Salvador was the first country in the world to make Bitcoin a recognized national currency. With the recent purchase, the Central American state holds over 2,000 BTC in the digital treasury.
The Bitcoin adaptation in the population is at best sluggish. Nevertheless, Bukele published last week first pictures of the blueprint for his prestige project: the Bitcoin City. According to the gilded floor plan, the city is to be arranged in a star shape around a monument to the key cryptocurrency. In addition to sights and an airport, one natural feature is of particular interest. Because the city is being built next to a volcano, which should not only provide energy for Bitcoin mining, but also electricity for the planned crypto metropolis.
US environmental groups concerned about crypto mining
Discussion about the environmental impact of Bitcoin mining continued in the US over the past week. Because on May 9th, a number of environmental organizations like Greenpeace and the Environmental Working Group a letter to the United States Office of Science and Technology Policy – a body that advises the President on technological issues. In the letter, the environmentalists are demanding strict measures from the White House to limit the energy consumption of crypto mining. They argue that prospecting is leading to greater use of fossil fuels and hindering the transition to renewable energy. The electronic scrap generated during mining is also mentioned as a problem factor.
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