Cryptocurrency Corner: the next decline in digital assets; Singapore intends to tax NFT, and El Salvador produces bitcoin bonds

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  • The cryptocurrency market has fallen again
  • Vote for the cryptocurrency mining crisis in the EU
  • El Salvador prepares bitcoin bonds
  • Singapore imposes tax on NFT

The cryptocurrency market has fallen again

As the crisis in Ukraine continues to shake all world markets, the cryptocurrency market has fallen again after last week’s gains. It looks like there will be several major flashpoints this week, including the EU’s mining ban vote and the issuance of Salvador bitcoin bonds (see below). Bitcoin started last week in the $ 38,000 range, crossing $ 42,000 in the middle of the week following a cryptocurrency order previously issued by US President Joe Biden’s White House. The executive order set key goals for U.S. institutions to lay the groundwork for better regulation, but there was little real content outside the instruction on the digital US dollar that was being prepared. The price of Bitcoin has dropped rapidly and is currently between $ 38,000 and $ 39,000. Ethereum rose above $ 2,700 in the same way when it was announced, but is trading again at $ 2,550 this morning.

Vote for the cryptocurrency mining crisis in the EU

The EU must vote today on laws that affect digital labor regulatory resources and can have far-reaching implications. Voting in the Cryptocurrency Markets (MiCA) continues, with most observers saying the result is currently unpredictable. The legislation contains key provisions that would prevent activities such as bitcoin production in the EU. The draft act, in its current form, will require miners to submit plans in line with the principles of environmentally sustainable development. Failure to do so will prevent them from operating in the EU. The consequences are enormous – the EU is the main jurisdiction for cryptocurrency mining and the cryptocurrency market in general, more than 10 percent. global hashing of bitcoins from the region. While there is no scale to the Bitcoin mining ban in China, the price effects of BTC and other cryptocurrencies that track its price could be significant in the next few days. The cryptocurrency market is sensitive to these events, and if the rules are passed, it could lead to another difficult trading period.

El Salvador prepares bitcoin bonds

El Salvador is making final preparations for the issuance of so-called “Bitcoin Bonds” this week. Last year, the Central American country embarrassed critics by making cryptocurrencies a legal tender in the country, and President Nayib Bukele announced on Twitter that the nation had received a token. The issuance of the first bitcoin-backed bonds is a milestone in the country’s bold cryptocurrency financing policy. No other nation in the world has come so far in mastering technology and has not taken such a bold step. Demand for bonds is said to be low among institutional investors who are waiting for the outcome of the initial demand for instruments and are listening to the warnings of key players such as the IMF. But as with cryptocurrencies, the origin of something new is often associated with local investors. The absorption of cryptocurrencies through tenders is limited within the country, so there may be cases when enthusiastic international observers respond to the call to purchase.

Singapore imposes tax on NFT

Singapore has announced its intention to start taxing non-convertible tokens (NFT). The technology had a great time in 2021, but the market struggled so far in 2022, and the broader cryptocurrency market has struggled with rising interest rates and the Ukraine crisis. Singapore says it will tax those who make money from oil operations and trade. Singapore, which is known for its low taxes, does not have a capital increase tax on real estate or traditional assets such as stocks and shares, so NFT owners will not be liable for it. However, as the authorities intend to tax NFT in the same way as other assets, they will be subject to a 22% income tax rate. When it comes to technologies such as oil and, more broadly, cryptocurrency, the country has been cautiously neutral. For example, it should actively inform its citizens about digital investment without discouraging it. The Singapore Monetary Authority (MAS) recently announced that it will not regulate non-financial transactions as the main assets of the tokens are beyond its scope.

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