It’s been another fascinating week in the world of crypto with interesting market developments taking place. Tesla considers accepting Dogecoin; Indonesia plans on taxing crypto profits; Ether hits all-time high with DeFi boom; South Korea regulators want digital currency exchange disclosures; and Nebraska banks to offer crypto services.
Tesla considers accepting Dogecoin
Elon Musk, CEO of Tesla, has published a Twitter poll asking the community if Tesla should start accepting Dogecoin as payment for their high-end cars. It’s no secret that Musk is a huge fan of DOGE and spoke glowingly about the cryptocurrency on Saturday Night Live where he made an eventful appearance.
Since the poll was published, Dogecoin has risen by around 20% and was sitting at $0.54 at the time of writing. Musk’s other company, SpaceX, also announced that plans were in place to send a rocket called Doge-1 to the moon. Musk recently announced that Tesla would soon be accepting Bitcoin as official payment and had no plans to convert that Bitcoin to fiat currency.
Indonesia considers taxing crypto profits
Due to growing interest amongst crypto investors in Indonesia, the government is now considering taxing cryptocurrency profits. Southeast Asia’s biggest economy is looking to consolidate its state revenue after the financial devastation caused by the pandemic.
Plans to create a tax scheme for cryptocurrencies are still at the discussion stage with a spokesman at the Indonesia tax office, Neilmaldrin Noor, saying that the office is considering levying income tax on crypto profits. Noor explained, “It is important to know that… if there is a profit or capital gain generated from a transaction, the profit is an object of income tax… so the taxpayer who receives capital gain has to pay the tax and report it.”
Cryptocurrency is regarded as a commodity for trading in Indonesia but is prohibited from being used as an instrument for payment. COO of local crypto exchange Tokocrypto, Teguh Kurniawan Harmanda, was the first to reveal Indonesia’s tax plan for cryptos last month. He mentioned that the Trade Ministry’s Futures Exchange Supervisory Board, together with government agencies and industry players, were in discussions on how the imposition of crypto taxes would work. The current proposal is for a 0.05% income tax on crypto profits, which is smaller than the 0.1% currently imposed on stock trades.
Ether hits all-time high with DeFi boom
The value of Ether has shot up to an all-time high of $4,200 after increasing optimism on DeFi’s potential growth. Decentralised finance, commonly known as DeFi, are platforms that enable investors to facilitate crypto lending outside of the traditional banking system. Most DeFi applications are embedded within the Ethereum blockchain.
Chief technology officer of cryptocurrency exchange Bitfinex, Paolo Ardoino, shared his optimism as he said: “The myriad possibilities of decentralised ledger technologies should be likened to a technological force of nature that will continue to disrupt finance and other businesses.”
South Korea regulators want details of digital currency exchange clients
Finance regulators in South Korea are looking to tighten regulatory control of the crypto sector by instructing the country’s banks to reveal details of transactions with local digital currency firms. There is the uncertainty of how many digital currency exchanges are in operation in South Korea, and authorities are making a special effort to identify this figure.
Banks have been instructed to reveal the details of these exchanges that have not yet implemented real-name accounts for digital asset users. So far, only the four biggest South Korean exchanges have implemented these measures. An anonymous exchange official revealed that many digital currency exchanges are currently operating without the government’s approval, making the job of authorities much harder.
The exchange official said, “Currently, cryptocurrency exchanges can operate without permission from the government, which is why it is difficult to identify the exact number of cryptocurrency exchanges. One way to find out is to track corporate bank accounts that collect customers’ funds.” All digital currency exchanges in South Korea must register with authorities by 24 September 2021 or could incur penalties under the Act on Reporting and Using Specified Financial Transaction Information.
Nebraska banks to offer crypto services
A recent Nebraska bill will soon allow banks to offer crypto services once ratified. This is due to the intervention of Nebraska senators who want banks in Nebraska to facilitate crypto transactions like the state of Wyoming.
State senators in Nebraska favoured the measure by the first of three legislature votes, with a total of 39 lawmakers voting to advance the bill. The bill hopes to adopt the Nebraska Financial Innovation Act and develop digital asset depository institutions. Moreover, it aims to provide for charter, operation, supervision and regulation of these institutions.
The bill was introduced by Senator Mike Flood who wants Nebraska to become an early adopter of crypto, which would benefit finance and technology jobs. He said, “This is a once in a lifetime opportunity not only for my district but the state of Nebraska.”