Switzerland’s ‘Crypto Valley’ Has Started Accepting Bitcoin, Ether for Tax Payments

Switzerland’s ‘Crypto Valley’ Has Started Accepting Bitcoin, Ether for Tax Payments

The Swiss canton of Zug has started accepting tax payments in cryptocurrency.

In a previous announcement in 2020, the Swiss authorities said that, from February, citizens and companies based in Zug will be able to pay up to 100,000 CHF (around $111,300) of their taxes in either bitcoin or ether. No partial payments in cryptocurrency will be accepted.

Zug has been dubbed “Crypto Valley” over the many industry companies drawn to the jurisdiction over its friendly blockchain and crypto regulation.

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“As the home of the Crypto Valley, it is important to us to further promote and simplify the use of cryptocurrencies in everyday life,” said Zug’s finance director, Heinz Tannler, when the tax initiative was announced.

Zug-based crypto broker and custodian Bitcoin Suisse has partnered with the canton, converting cryptocurrency payments into Swiss francs for the tax office.

According to the Zug Canton website, residents can request to pay taxes in cryptocurrency and will be emailed a link taking them to the crypto payment option.

Crypto mania! Bitcoin leaps past $52,000 for the first time

For some, the Bitcoin rally is a symptom of the speculative frenzy caused by ultra-low interest rates and other stimulus measures. Others say cryptocurrencies are becoming more mainstream.

Bitcoin’s incredible rally shows little sign of abating yet after the token jumped past $52,000 for the first time.

The largest cryptocurrency was little changed in Asian trading Thursday at about $52,100 after a fivefold surge in the past year

Bitcoin’s rally for some is emblematic of speculative froth in financial markets awash with stimulus. The crypto faithful counter that the digital asset is grabbing more mainstream attention, especially after Tesla Inc.’s recent $1.5 billion purchase. MicroStrategy Inc. boosted its convertible debt sale to buy Bitcoin by nearly half to $900 million and cut the coupon to 0%, making it virtually a straight bet on the price of the cryptocurrency.

MicroStrategy’s step is “a warning sign if there ever was one that things are getting out of hand in the crypto world,” Jeffrey Halley, a senior market analyst at Oanda Asia Pacific Pte, wrote in emailed comments.

[Bloomberg] Others take a different view, contending that demand from institutional investors and companies is set to expand, driving further gains.

“There are a number of reasons why Bitcoin is soaring, but what stands out most is the trend that MicroStrategy started and Tesla popularized: moving institutional balance sheets into Bitcoin to hedge against inflation,” said Nicholas Pelecanos, head of trading at NEM.

Activity in Bitcoin futures suggests traders don’t see a sudden end to the crypto rally, with spreads continuing to widen between the active contract and March futures, according to data compiled by Bloomberg.

Shares of Asian crypto-linked companies have advanced, too. Japan’s Monex Group Inc. jumped 11% to hit a 13-year high on Wednesday, while BC Technology Group Ltd. in Hong Kong closed at a record. Both stocks were down Thursday in Asia, though.

[Bloomberg] JPMorgan Chase & Co. strategists said Bitcoin’s volatility needs to ease to prevent its rally from fizzling. Other commentators see a mania likely to end in a bust akin to the implosion in 2017.

The digital coin’s 60-day realized volatility is around the highest since May last year, though still below the levels seen around the peak of its last boom some three years ago.

Crypto ban may drive black market trade

NEW DELHI : An overarching ban on private cryptocurrencies in India might prompt large investors to take their business underground, industry experts said.

The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 to prohibit private cryptocurrencies is scheduled to be tabled in the ongoing budget session of Parliament. “The fact is, crypto runs on the internet. The control does not rest with one person, one organization, or one country. Hence, it is not possible to ban crypto trading," said Kumar Gaurav, founder and chief executive of online banking platform Cashaa.

Gaurav added the government can ban the “legitimate use of crypto", which will eventually lead to international trading or the rise of the black market in India. “People might still trade but it will become difficult to track within the country."

“When the banking ban came in the last time, people were stuck. Exchanges were asking people to withdraw their money, but investors were holding on, hoping to take their assets offshore," an industry executive said, requesting anonymity. He was referring to the Reserve Bank of India’s (RBI) ban on cryptocurrencies, which was later quashed by the Supreme Court in March 2020.

News reports said the government will give 90 days or more for people to sell their crypto assets, but this may not be feasible either.

According to executives from two top cryptocurrency exchanges in India, the ban would create an environment where there are many sellers but no buyers. This will further drive people towards underground markets, or to take their money offshore.

The industry professional quoted above said crypto exchanges had hundreds of crores of rupees stuck in bank accounts when a ban was enforced last time. “There is a chance that people will move offshore, to foreign exchanges."

“There’s a large possibility (of underground markets rising)," said Nischal Shetty, founder of WazirX, the largest crypto exchange in the world.

Shetty said exchanges have existed in India for about five years now, whereas bitcoin is over 10 years old, and there is no way to get data on the wealth created by investing in crypto before these centralized entities came in. “All the liquidity of buying and selling cryptocurrencies in early days would have been in the unregulated markets, off the books."

Experts hope that the Centre will try and regulate the industry instead of imposing an outright ban. “Government should consider regulating the sector. That would be good for the country, industry, customers and the government," said Gaurav Chopra, executive director, Payments Council of India. “Cryptocurrency exchanges have already signed a code of conduct and we have sent a copy of the same to certain people in the government."

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