Caitlin Long Against The Recently Released Rhode Island Crypto Tax Proposal
During the last few years, several jurisdictions have been trying to regulate the virtual currency market. Cryptocurrencies and blockchain companies expanded all over the world and the legal framework was not able to follow the developments in the crypto space.
This time, Rhode Island has proposed new tax regulations for virtual currencies. The intention seems to tax software development and R&D as well. The new Rhode Island Senate Bill No. 251 presented is titled: “An act relating to taxation — sale and use tax–non-collecting retailers, referrers, and retail sale facilitators act.”
The summary of this act reads as follows:“This act would extend the requirement to collect sales tax to remote sellers in a way that conforms to a recent U.S. Supreme Court decision making it easier for states to compel collection of the sales tax from retailers who do not have a physical presence in their state.”
The intention is also to assess sales tax on marketplace facilitations, including those that provide cryptocurrencies used by buyers to pay for services.
#RhodeIsland looks to assess sales tax on marketplace facilitators including those who provide a #virtualcurrency used by buyers to obtain services. The states are pouncing on this new source of sales tax rev in the wake of South Dakota v. Wayfair (https://t.co/rTY2adUrty) pic.twitter.com/tBYoONpxVp
— Drew Hinkes (@propelforward) February 9, 2019
Caitlin Long, a crypto supporter and Wall Street veteran wrote on Twitter that companies should leave states that do not want blockchain technology to enter the market. Caitlin Long has been working in Wyoming to propose regulations to attract crypto and blockchain companies to the state.
ARE YOU KIDDING?? Check out #RhodeIsland #crypto tax proposal—it’s so broad that it includes taxing software development + R&D. Get out of states that show by actions they don’t want #blockchain cos & come to #Wyoming where we do! @Tyler_Lindholm @SenatorDriskill @GordonGovernor https://t.co/We4n3hNkIx
— Caitlin Long 🔑 (@CaitlinLong_) February 10, 2019
Gabor Gurbacs, Director at VanEck, answered to Caitlin Long that he would love to see more states competing for innovative businesses related to the fintech and crypto market. He has also mentioned that one of the examples is Wyoming.
Wyoming Senate has introduced new bills to support cryptocurrencies as a legal form of money. One of the main goals achieved by the state is related to recognize virtual currencies as personal property. At the same time, back in January, lawmakers in Wyoming have presented a new bill to allow firms to issue certificate tokens rather than stock certificates.
There are other jurisdictions around the world that have already implemented more open legal frameworks for virtual currencies and distributed ledger technology (DLT) to grow. Two of these countries are Malta and Switzerland, that are currently attracting firms from all over the world.
The U.S. Securities and Exchange Commission (SEC) is also trying to have a more active position in the crypto market.
Bitcoin Educator Andreas Antonopoulos Gives a Digital Deep Dive on Blockchain Transactions
One of the ways by which the crypto industry can make significant process is through the education of those who make use of crypto and those who simply observe the industry.
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He recently uploaded a video in which he touched the process of manual construction of transactions that have multiple inputs in response to a question posed by a user about whether the process will be done by a blockchain or not. Antonopoulos explained that the process is done by a wallet and not a blockchain.“You can conduct the process with a variety of wallets that allow you to construct transactions. With multiple inputs. Electrum wallets and other web-based wallets are good examples of platforms that give you the liberty to control transactions. Just to clarify, the process is done by the wallets and not by the blockchain,” Antonopoulos said.
He also pointed out that the construction wallet is based on an algorithm and if more than one payment is needed due to small amounts the wallet will construct the transactions with payments. This process, he explained, is called coin selection and helps in the movement of various transactions.
Also, he touched on the concept of change on the blockchain and pointed out that bitcoin transaction outputs have two states in which the exist which are spent or unspent and that there is no concept of a half-spent transaction.
While this was very helpful for users, some controversy was caused when Antonopoulospointed out that the scalability problem that bitcoin struggles with will always exist and that solving one issue will inevitably bring up more.
“..and you can’t, in the beginning, solves the problem for the end there is no end and also if you prematurely optimize if you try to solve scale problems for a scale that doesn’t yet exist you shift the problem somewhere else in the case of cryptocurrencies,” he said.
The Need for an Education
While Antonopoulos might have caused some controversy, it cannot be denied that his efforts to educate the public on blockchain and crypto are highly needed, especially seeing as many of the problems faced by users can put down to a lack of education about how blockchain works.
An example of this can be seen in security as a research piece that was published recently pointed out that over 700 crypto wallets were broken into by the researchers merely guessing the passphrases which were usually weak and repetitive phrases.
In such a case, education about how wallets, blockchain, and crypto work could go a long way to prevent such issues, ensuring Industries safer for all.
Blockchain Capital Ltd Co-Founder: Release Of New Crypto Assets By Businesses Isn’t “Unreasonable”
Co-Founder Of Blockchain Capital Says That The Release Of New Cryptocurrencies From Businesses Isn’t “Unreasonable”
There is a strong possibility that multinational firms could end up creating their own cryptocurrencies. Gavin Brown, the co-founder, and director at Blockchain Capital Limited commented that this idea isn’t “unreasonable” right now while speaking at the Credit Suisse Global Supertrends Conference, hosted in Singapore. According to reports from CNBC, the director said that it would be possible to create a CNBC coin as the “democratization of money” happens.
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To further explain this concept, Brown brought up prepaid cards for Starbucks. With “over a billion dollars of assets work on their balance sheet” of people that like their morning coffee enough to buy a prepaid card, it is clear that they trust the brand to be around and that they like spending their money with the company. Considering that there are some companies with better credit than others, like McDonalds over the whole government of Ireland, there is a chance that multinational companies could easily get involved to start using crypto as something between an asset and a loyalty credit.
Brown believes that the next “big one” that could happen is most likely to be Facebook coin, even though the company has yet to actually confirm that they’re following this path. However, reports indicate that the social media platform has been working on crypto asset to tie directly with fiat currency, which will be used through their messaging app. So far, both Bloomberg and the New York Times have run this report, and Facebook still has not expanded on the work.
When asked if it would cause too much confusion to have many companies simultaneously offering their own tokens, Brown commented that the mostly likely outcome would be “groups or alliances” developing. He even called the launch of the JPM Coin by JPMorgan Chase a “really intelligent play.” However, the rise of the coin’s popularity will ultimately dictate how strong the asset becomes.
China’s Foreign Exchange Regulator Piloting Blockchain in Trade Finance
The agency that regulates and manages China’s foreign exchange reserves has developed a blockchain system aimed to address inefficiencies in cross-border trade finance.
As reported by local financial news source CNStock, the State Administration of Foreign Exchange (SAFE) worked with the Hangzhou Blockchain Technology Research Institute to build the open blockchain platform, which uses multi-signature technology to keep transaction content private, revealing details only to the firms involved and regulators such as those relating to customs, taxation, industry and commerce.
Traditionally, China’s import and export financing uses a manual, paper-based operation for processing a hugely complex industry and that brings low efficiency, commonplace errors, high operational risk and, thus, elevated cost of financing. Putting the financial data on a distributed network enables information to be shared transparently and in real-time, according to the report.
The forex watchdog’s blockchain platform takes a focus on export receivables – the funds owed to a company by a foreign buyer after delivery – allowing firms to enter data on financing, audits, loans repayments and so on, and manages the entire process. It further automatically verifies customs documents and calculates a final balance for the customs declaration, a factor that prevents double or excessive financing, according to the report.
With initial development now complete, SAFE will now pilot the blockchain platform in three major trading provinces – Jiangsu, Zhejiang and Fujian – and two cities, Shanghai and Chongqing, CNStock indicates.
The pilot will run for six months and is expected to be taken nationwide going forward, with many banks said to be involved in the scheme.