France joins Portugal in its policy of tax-free cryptocurrency transactions. The French government announced that crypto-to-crypto trading would not be taxed. However, taxes will apply if cryptocurrencies are being traded for fiat currency. Furthermore, France will introduce a value-added tax (VAT) for purchases made through cryptocurrencies.
Cryptocurrencies: The present and the future
Many countries and states failed to realize the value of blockchain technology and cryptocurrencies. Because of this negligence, they were unable to benefit from the cryptocurrency’s journey across the last ten years.
Bitcoin, the leading cryptocurrency paved the way for it all back in January 2009. Since then, cryptocurrencies have come a long way. Initially, they were treated as Ponzi schemes or tools for money laundering and terror finance. However, now, the world’s outlook has changed significantly as these are now considered as the payment system of the future.
France and Portugal have been supporting cryptocurrencies and are welcoming investors with open arms. Both countries have tax-free cryptocurrency transaction. While France chose to tax crypto to fiat trades, Portugal has chosen not to tax crypto trades at all.
French finance minister Bruno Le Maire made the announcement. Bruno had previously given a warning to Facebook’s Libra. Bruno wants to stop Libra’s development and urges the European Central Bank (ECB) to support him.
Tax-free cryptocurrency transactions: What is the reason behind this move?
Countries supporting cryptocurrencies may gain huge benefits as many people across the globe are becoming more “crypto-aware.” The people from much harsh tax jurisdiction may choose to migrate to any of these countries.
Furthermore, countries that are not willing to take the necessary steps to ensure crypto growth may find themselves falling behind in the “crypto race.”
Bruno also discussed the ECB’s plan of launching a digital currency. It is evident if multiple nations fail to back a single digital currency, each country would just develop their own digital currencies. This would result in digitalization of the current financial system along with all its flaws.