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Germany declares tax-free crypto profits after 1 year, even if used for staking and lending

The German Ministry of Finance has published a letter officially confirming that the sale of crypto assets is tax-free after one year, even if the coins are used for gambling and lending.

How Cryptocurrency Profits are Taxed in Germany

The German Ministry of Finance announced on Wednesday that it has published a letter on cryptocurrency income tax, in which it states:

This is the first time that there is uniform administrative instruction at the national level on the subject.

The Ministry of Finance detailed that, at a hearing that took place last year, one of the most discussed questions was whether the tax-free period for borrowing and staking cryptocurrencies should be a minimum of 10 years.

The ministry highlighted that in coordination with the federal states:

The letter now states that the so-called 10-year period does not apply to virtual currencies.

In Germany, cryptocurrency is seen as “a private asset”, meaning it “attracts an individual income tax rather than a capital gains tax”, explained crypto tax firm Koinly, emphasizing that Germany “only taxes cryptocurrencies if they are sold within the same year it was purchased.”

More detailed Koinly:

As a “private sale” in Germany, crypto profits are completely tax-free after a one-year retention period.

“Additionally, earnings from cryptocurrency sales of up to €600 per calendar year remain tax-free,” the company added, noting that previously, “when it comes to withdrawing staked cryptocurrencies, this tax-free retention period is a minimum. of 10 years.”

Citing the letter published by the Ministry of Finance, cryptocurrency consultant Patrick Hansen explained on Twitter:

The sale of the purchased crypto assets will remain tax-free after one year, even if they are used for staking/borrowing.

Parliamentary Secretary of State Katja Hessel commented: “For individuals, the sale of purchased bitcoin and ether is tax-free after one year. The period does not extend to 10 years, even if, for example, Bitcoin has previously been used for lending or the taxpayer has provided ether as equity to someone else.”

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Central Bank of Chile studies issuance of digital currency

The Central Bank of Chile revealed that it is studying how to issue a national digital currency, the digital peso. The bank issued a report entitled “Issuance of a central bank digital currency in Chile”, where it explores the possibility of creating a central bank digital currency (CBDC) in the future, the mechanism it could use and how it will consult. all sectors of the economy on this issue.

Central Bank of Chile considers CBDC issuance

More banks in Latin America are considering issuing their own central bank digital currencies (CBDCs) to take advantage of the different opportunities that may present themselves. The Central Bank of Chile has just released a new report studying the opportunities and disadvantages that issuing a digital peso can bring. The report, entitled “Issuance of a digital currency by the Central Bank of Chile”, also studies the different forms that this currency can take.

The document, prepared by the bank’s payments group, is “framed in a context of increasing digitalization of payments, which has been driven by rapid technological progress and the incorporation of new instruments and players in the payments market”. In this regard, the report concluded that:

Issuing a CBDC would make it possible to leverage the benefits associated with digital transformation, while mitigating some of its risks. In particular, a CBDC could contribute to the development of a more competitive, innovative, integrated, inclusive and resilient payment system.

The report also calls for a deeper analysis of the cost-effectiveness of issuing this currency.

More studies needed

While many central banks around the world are studying and researching the issuance of digital currencies, many have not moved on to the implementation phase. The document needs further analysis and study in this regard, since there are practically no norms or guidelines for good practices on how to proceed in the construction of a project of this type.

Currency digitization can also have unforeseen negative impacts on the national economy, so any future implementation would have to be “carefully scrutinized”. However, the central bank considers that this is the time to face this task and start working on its technical capabilities, and move forward in the development of projects aimed at testing different implementations of the currency.

The bank also indicated that it will continue to consult and maintain an open dialogue with all institutions in the economic area. Brazil and Mexico are other Latin American countries that are also working to establish their own CBDC.

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Abu Dhabi-based Matrix Goes Live With More ADGM Approved Virtual Assets

Matrix, a global multilateral virtual asset trading platform, lists two new assets: XRP and XLM. The listings are part of Matrix’s attempt to bring a broader range of options to traders and investors around the world. Abu Dhabi Global Market (ADGM), the leading global jurisdiction for virtual assets, has approved these assets for listing on the regulated Matrix platform.

ADGM is an award-winning financial center and an International Financial Free Zone. With the Government of the Registration Authority (RA), the Financial Services Regulatory Authority (FSRA) and the ADGM Courts, ADGM upholds a fair and transparent trading ecosystem. ADGM’s thorough regulatory practices ensure that all approved assets are consistent with its internationally recognized standards.

Matrix expands its list of supported virtual assets to include:

XRP, the native currency of RippleNet, a blockchain-based payment network,

Lumen (XLM), native currency of Stellar, a decentralized protocol for exchanging cryptocurrencies for fiat.

“Our goal at Matrix has always been to offer retail and corporate investors a single platform with the security of regulatory oversight,” says Vasja Zupan, President of Matrix. “We are excited to expand our range of tokens and stablecoins as the first Multilateral Trading Center in ADGM to expand our virtual asset offering, with even more additions in the works. We pride ourselves on providing peace of mind to investors through safe and expanding regulated trading options for our community.”

About the matrix

Headquartered in Abu Dhabi, Matrix is ​​a globally operated and regulated multilateral trading engine and custodian dedicated to providing a compliant, secure and fast virtual asset trading experience. Matrix obtained its license from the Abu Dhabi Global Market (ADGM) in relation to Virtual Assets. Matrix provides AML/KYC compliance, regulatory monitoring, and offline storage to protect the platform and users, as well as multi-node disaster tolerance, remote disaster recovery, and multi-server failover to ensure business system stability and reliability. Leveraging its high-performance core matching engine, Matrix is ​​able to fulfill large volumes of trade orders. Matrix is ​​one of the few global trading platforms that supports global fiat deposits, allowing for faster trading. For more information visit https://www.matrix.co/

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More than 100,000 Cubans turn to cryptocurrencies to avoid sanctions

Strict US sanctions restricting Cuba’s ability to conduct international trade have led more than 100,000 Cubans to turn to cryptocurrencies as an alternative path to financial freedom.

Companies chose cryptocurrency

US sanctions imposed on the communist country of Cuba prevent the use of internationally accepted credit and debit cards. Online payment channels like Paypal, Revolut and Zelle are also banned in the country. Therefore, a significant part of the population, feeling the restrictions imposed by sanctions, chose cryptocurrency as an alternative means of transaction. These Cubans, who include many small business owners, have benefited from the advent of mobile Internet that arrived in the country just three years ago. The spread of smartphones and mobile internet in this island nation was quite expansive as it opened other payment channels and financial freedom to a largely unbanked population. Local entrepreneurs believe that thanks to digital currencies, their operations are no longer dependent on payment service providers, which ends up rendering all bans inconsequential.

Dr. Emily Morris, an economist at University College London, believes that the fact that Cuban citizens are turning to cryptocurrencies is not surprising. she said,

“If you can transact directly between two parties that don’t have to go through a bank, that would be interesting.”

Cryptographic Regulations in Cuba

The previous lack of regulation in the country has resulted in an increase in cryptocurrency activity, especially during the initial months of the pandemic. Local cryptocurrency exchanges have seen an influx of customers, nearly doubling on a monthly basis. In 2021 there was talk of the Cuban government investing in cryptocurrencies. Shortly after, it was announced that the central bank of Cuba would fulfill the mission of exploring the regulation of cryptocurrencies. The bank would also establish an action plan to register and license crypto service providers in the country. It was also revealed that cryptocurrency payment authorizations would only be granted in matters of “socio-economic interest” in order to monitor all cryptocurrency operations and prevent illegal and fraudulent activities.

Earlier this month, the Cuban central bank announced its intentions to implement a regulatory framework for digital assets, starting with a compulsory license for virtual asset service providers. The country’s central bank has already issued a Central Bank Digital Currency (CBDC). Cuban President Miguel Diaz-Canel has also expressed his favorable views on the sector and is reportedly studying the legalization of cryptocurrency payments. This has led to speculation that Cuba could be following in the footsteps of El Salvador, the Latin American country that adopted Bitcoin as legal tender.

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Tron DAO Reserve buys $38 million of TRX to protect USDD stablecoin

On May 5, Tron’s USDD algorithmic stablecoin was launched, and so far, the fiat token has been listed on various decentralized finance (defi) protocols. Two days later, Tron DAO Reserve announced that it has purchased 504.6 million tron ​​(TRX) to support the algorithmic stablecoin as the project aims to leverage a decentralized currency reserve similar to Earth’s UST reserves.

Tron DAO Reserve and Justin Sun reveal $38 million TRX purchase

Terra’s UST reserve system is becoming a popular scheme, and Tron’s USDD stablecoin project is following suit. Bitcoin.com News reported on the algorithmic stablecoin project Tron on April 21, and the fiat crypto asset has been officially launched since then. The project has several partners now and USDD is listed on Pancakeswap, Kyberswap, Sunswap, Sun.io, Curve Finance, Uniswap and Ellipsis.

According to tronscan.org, there is approximately $211,245,005.49 at the time of writing. Statistics show that as of Saturday, May 7, 2022, Uniswap version three (v3) is the most active exchange for buying and selling USDD. While the $211 million market cap is a small thing for Earth’s UST ($18.7 billion), it has only been around for two days. While terrausd (UST) recorded US$990.3 million in 24-hour transactions, USDD recorded US$2.31 million in the last day. The USDD market valuation is higher than Gemini’s (GUSD) market capitalization of $199.5 million.

On Saturday, Tron DAO and Tron founder Justin Sun announced that the team had purchased 504,600,250 TRX at an average price of 0.07727 per unit. The purchase will be used as a reserve asset to “safeguard the blockchain industry and cryptocurrency market,” reserve account Tron DAO said Saturday afternoon.

“[Tron DAO Reserve] has done its job,” tweeted Tron founder Justin Sun this weekend.

Decentralized, Algorithmic and Centralized: The Quest to Perfect Stablecoin Continues

While decentralized and algorithmic stablecoins sound good in theory, there are concerns and doubts about whether or not they can maintain a stable peg as long as they exist. Of course, some centralized stablecoin projects in the past have failed, and Makerdao’s decentralized stablecoin DAI was tested during the ‘Black Thursday’ event on March 12, 2020. Prior to the March 12 event, Bennett Tomlin’s blog post predicted the Ethereum (ETH) price stress that could affect the DAI USD parity.

In November 2020, the issuer of stablecoin OUSD, Origin Protocol, suffered an instant lending attack and the coin temporarily lost its peg. During the first week of April, the Waves-based neutrino stablecoin usd (USDN) temporarily dropped from the dollar. A year ago in April, the fiat value of the stablecoin fei usd (FEI) dropped below one dollar for a short period of time. So far, several of the projects mentioned above have recovered shortly after the parity loss, and stablecoin projects have maintained a stable parity ever since.

The Tron DAO Reserve purchase of 504,600,250 TRX was worth $38.99 million at the time of liquidation. The TRX purchase also follows the recent acquisition of $1.4 billion worth of bitcoin (BTC) by Luna Foundation Guard (LFG). The non-profit LFG now holds 80,394 BTC and $100 million worth of AVAX to protect UST. In addition, Tron DAO has partnered with three crypto institutions that are now whitelisted Tron DAO Reserve members. Tron DAO Reserve’s institutional partners include Poloniex, Alameda Research and Amber Group, while Tron DAO Reserve acts as the “initial custodian” of USDD.