Israel to Tax Bitcoin

The government of Israel would treat bitcoin and other cryptocurrencies as a kind of property for tax purposes
19 February 2018   1084

On February 19, Israel's government released the notice which confirms that Tax Authority will regard cryptocurrencies as "a property, not a currency" in order to make it taxable. It is important to note that the Tax Authority detailed its position first in January of this year.

According to the circular, profits from cryptocurrencies will be subject to capital gains tax at rates between 20-25%, while miners or traders must pay 17% VAT in addition to capital gains tax.

The government of Israel started exploring the taxation of cryptocurrencies as early as 2013.

Today’s announcement was largely expected because of previous draft release.  In January, Tax Authority announced another draft circular, which outlined potential ways in which the government could tax ICOs.

BIS to Issue Research on Bitcoin Problems

Researcher from the Bank of International Settlements believes BTC should abadon PoW
22 January 2019   81

Researchers from the Bank for International Settlements published a report in which they stated that only by abandoning the Proof-of-Work mechanism of consensus, Bitcoin could get rid of its current and future problems.

According to them, in the future, when the size of the rewards for mining drops to zero, transaction processing fees alone will not be enough to justify the miners' activities. Consequently, the Bitcoin network will become so slow that it will be impossible to use it, the authors argue.

Simple calculations suggest that once block rewards are zero, it could take months before a Bitcoin payment is final, unless new technologies are deployed to speed up payment finality. 

Raphael Auer

Principal Economist, BIS

The BIS admits that second-level solutions such as the Lightning Network can ease the task, but “only fundamental remedy would be to depart from proof-of-work.” According to the report, the transition to alternative consensus mechanisms “require some form of social coordination or institutionalisation”.

The Bank for International Settlements contributes to the cooperation of 60 central banks from various countries of the world, which account for 95% of global GDP.

Earlier this month, the agency disclosed statistics on central bank initiatives in the field of state digital currencies. According to him, about 70% of central banks conduct research related to the issuance of national digital currencies, but plans for their implementation and the perception of the issue vary considerably in different countries