Ok, Governments… Let’s talk straight! We all know that one of the reasons a lot of you guys are pushing back against cryptocurrencies is that you are concerned about everyday folks partaking in tax evasion; a pursuit generally reserved for the rich and powerful (with great enthusiasm, I might add!).
There are constant references to these controls being in place to avoiding the funding of terrorism, organised crime, human trafficking, etc., but I’m confident a lot of us have already grown tired of this excuse for the constantly expanding Orwellian interest that the authorities have in our everyday lives.
This article won’t go into the many ways in which control over the money supply and what we do with our money helps to keep the political and banking class in power. To be honest, I happen to believe that even the majority of bankers and politicians are not fully aware of the mechanics of the system and are simply “doing their jobs” or adhering to the status quo that they’ve grown accustomed to in their family and social bubbles.
So, governments, what’s the real overwhelming reason you’re not embracing cryptocurrencies just yet? In a word, TAX.
So, What are you Worried About?
The advent of digital payments has been an absolute godsend for the taxman. With the vast majority of transactions being made via our cards and bank accounts, which are now largely open books for the powers that be to peruse at will, administrations are able to set up algorithms to trigger alarms if anyone appears to be becoming more prosperous than they are admitting to, with inspections, threatening letters and so on being sent out more efficiently than ever (to individuals and small businesses, at least).
Cash, on the other hand, is incredibly inconvenient when it comes to charging income tax. If Bob pays María €50 cash for a haircut in his living room, and María doesn’t include that in her tax return, well… Horror of horrors, María isn’t getting taxed! Even worse, she can go and buy stuff with that cash and the administration’s algorithms won’t even know!
But wait! It’s not all bad news. When María goes to the supermarket to buy some guilt-laden Friday-evening oven pizza and beers, that cash payment is registered in the checkout and… happy days! In most countries, some sort of sales tax is applied and the supermarket pays tax on the profit also. At least they will in theory.
Cryptocurrencies are Digital Cash
At Zypto Pay, we very often discuss the fact that cryptocurrencies are very much like a digital form of cash. Blockchain technology allows for the transfer of a single unique copy of a digital asset from one person to another in much the same way as one passes physical currency from hand to hand.
So, when Bob sends €50 in Bitcoin to María for a haircut, this is not being registered by the banks and public administrations BUT… María now has €50 to spend.
Just as with cash, the way to ensure that money flows through the system, with yummy taxes being skimmed at every step, is to encourage companies to accept crypto payments. Emphasis on the word ENCOURAGE!
If a company uses Zypto Pay to take payments, every transaction is registered, associated with an order (that is expressed in fiat value at the time of purchase). Taxation and accounting are actually made simpler than it is with cash payments.
Global Digital Cash Economy
Now, government friends, let’s not think so small.
The fiat cash economy is limited in terms of speed, efficiency and geographical reach. What we have now, though, is a kind of cash that knows no borders. Cryptocurrencies are already revolutionising the way people transact with one another worldwide. With crypto payments it makes no difference if the person you are paying is in the next town or if you’re on the opposite side of the world.
This comes at the same time as an exponential increase in the people working online, even more so after Covid.
Crypto is the Cash of the Internet
As the people in charge of improving the economy of these “countries” that you profess such dedication to, why would you not do your best to ensure that the flow of funds from this global digital cash economy concentrates in your corner of the planet, adding to the wellbeing of the citizens that vote for you to keep your jobs?
Refusal to embrace such a revolutionary new way to allow wealth to flow into your local economy, to me, can only mean one of two things:
- You don’t understand it
- You have other priorities
If case 1 is the issue, please reach out and I will be delighted to brainstorm it out with you.
If the case is the latter, you should honestly be ashamed of yourselves.
Ignorance can be remedied with education and communication. Selfish interests, however, should not be tolerated from people in public offices.
I always say this, crypto should be accepted as a form of payment in the whole word. I don’t believe in some part of the world, crypto is seen as illegal. In this 2024 wow, It’s really so sad.
I believe that’s what zypto pay is here for, make easy and fast transactions with them. Ask questions too, don’t be too ignorant on these stuffs.
Seems like it’s just delaying the inevitable now. Countries and businesses that adopt this change first I feel will greatly benefit. The fees / speed alone are worth considering crypto over regular payment methods.
Good blog from Joe and a great example used to highlight the benefits.
tldr;
Many push back against cryptocurrencies fearing they enable tax evasion, typically a concern for the wealthy. Governments cite preventing terrorism and crime, but the real worry is taxation. Digital payments have simplified tax collection, as bank and card transactions are easily monitored. Cash payments, however, often escape notice, creating tax gaps. Cryptocurrencies, acting like digital cash, pose a similar challenge.
Why Governments Resist Cryptocurrencies:
Tax Evasion: Untracked crypto transactions can elude taxes, much like cash.
Digital Cash: Cryptocurrencies allow direct peer-to-peer transfers, bypassing traditional financial oversight.
Global Economy: Crypto facilitates seamless international transactions, challenging traditional tax jurisdictions.
Encouraging Crypto Adoption for Tax Compliance:
Platforms like Zypto Pay can register every crypto transaction, simplifying taxation and accounting.
The Broader Picture:
Cryptocurrencies enhance the global digital cash economy, vital in an increasingly online world post-COVID.
Embracing crypto can drive economic growth and concentrate wealth locally.
Government’s Role:
Understand and integrate cryptocurrencies to boost the local economy.
Overcome ignorance and prioritize public interest over personal agendas.
Governments must adapt to harness the potential of cryptocurrencies, ensuring fair tax collection while fostering economic innovation.