The United Kingdom’s tax, payments and customs authority has reportedly asked cryptocurrency exchanges to hand over data in a bid to identify those that have failed to pay taxes owed on their digital assets. Nigel Green, CEO of financial consultancy deVere Group, believes that this is a good sign for the future of cryptocurrencies like Bitcoin, Ethereum and Ripple.
According to a recent study by Blox.io, only 5% of accountants believe that their clients are accurately disclosing their digital assets and transaction in tax filings.
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Tax authorities seem to have caught on. As reported by Coindesk, industry sources claim that HM Revenue & Customs (HMRC) has requested that three exchanges – Coinbase, eToro and CEX.IO – provide lists of customers and transaction data in a bid recover unpaid taxes.
According to Green, this move is a “clear sign” that popular cryptocurrencies like Bitcoin are becoming a mainstream part of the finance world, if not the “future of money”.
“HMRC’s growing interest in cryptocurrencies underscores that their public influence and appeal is growing.”
A “slew of indicators” suggest crypto is gaining traction
“There is a continual and increasingly rapid slew of indicators that digital currencies are gaining traction in our increasingly digitalised world,” Green said.
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By GlobalDataThe deVere CEO points to the numerous regulatory guidelines being prepared by financial regulators around the world as further evidence, as nations rush to keep up with early adopters such as Japan, Malta, Switzerland and South Korea.
The UK’s Financial Conduct Authority (FCA), for example, finalised its guidelines on crypto assets last month, which is expected to clarify which assets fall under certain categories, such as exchange tokens or security tokens.
As well as regulation, a string of countries have also embraced crypto as the future of currency with the launch of their own state-backed assets. China has confirmed that it will soon launch a cryptocurrency, joining Venezuela and its Petro crypto coin. Iran and India are also reportedly working on state-backed digital assets.
According to Green, most major financial institutions have already, or are preparing to establish crypto desks, while retail and institutional investors are also “piling into the crypto sector market”, all of which points to cryptocurrency’s mainstream acceptance.
And with Facebook set to launch its own cryptocurrency, Libra, that investment is only set to increase – “where Facebook goes other tech monoliths will follow”, Green believes.
Economy leaders must accept crypto
Green believes that cryptocurrencies are here to stay, “much to the chagrin of financial traditionalists like Warren Buffet and Donald Trump”.
The President of the United States tweeted last month that he is “not a fan of Bitcoin and other cryptocurrencies”, which are “not money” and have a value that is “based on thin air”. Trump also hit out at Facebook’s Libra currency, which he believes will have “little standing or dependability”.
I am not a fan of Bitcoin and other Cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air. Unregulated Crypto Assets can facilitate unlawful behavior, including drug trade and other illegal activity….
— Donald J. Trump (@realDonaldTrump) July 12, 2019
….Similarly, Facebook Libra’s “virtual currency” will have little standing or dependability. If Facebook and other companies want to become a bank, they must seek a new Banking Charter and become subject to all Banking Regulations, just like other Banks, both National…
— Donald J. Trump (@realDonaldTrump) July 12, 2019
…and International. We have only one real currency in the USA, and it is stronger than ever, both dependable and reliable. It is by far the most dominant currency anywhere in the World, and it will always stay that way. It is called the United States Dollar!
— Donald J. Trump (@realDonaldTrump) July 12, 2019
However, Green believes that Trump, and other world leaders that hold similar views, are placing themselves “on the wrong side of history”.
“Standing on the sidelines, or worse looking backwards, on the issue of cryptocurrencies – which are redefining and reshaping the financial system – is a baffling approach for the leader of the world’s largest economy to take.”
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