- Members of the European Parliament have adopted a resolution calling on member states to coordinate the taxation of cryptocurrencies.
- The resolution also proposes adoption of blockchain technology for more transparent and efficient collection of taxes.
- The cryptocurrency market has gained more than $47 billion in the past 24 hours after several days of flat trading.
Cryptocurrency regulation is undoubtedly one of the most important challenges facing governments around the world, and cryptocurrency taxation is an equally serious concern. While many other countries have taxed cryptocurrency transactions, the European Parliament has finally taken the first steps in this direction.
Members of the European Parliament (EP) voted on October 4th for a non-binding resolution establishing a framework for cryptocurrency markets. More than 91.3% of the votes were collected for approval of the resolution, with only 7 votes against.
This resolution works in two directions in the cryptocurrency market: first, it targets cryptocurrencies for unified taxation, and second, it uses blockchain technology to implement tax services.
A decision is made in the case of a digital asset tax
"... cryptocurrencies should be taxed fairly, transparently and effectively. But it also urges the authorities to consider a simplified tax regime for small casual traders and small transactions.
To achieve this, the resolution recommends establishing a cryptocurrency tax avoidance policy and developing a clear and commonly accepted definition of cryptocurrencies.
It also encourages the development of a comprehensible definition of a chargeable event. The second decision
"The conversion of cryptocurrencies to fiat currency may be a more appropriate option and urges the Commission to specifically consider this option alongside the more general option to identify potentially taxable events."
In addition to the burden on cryptocurrencies, the resolution identifies blockchain as a key and efficient tool. The resolution proposes using its technology to automate tax collection and increase transparency by limiting corruption.
The cryptocurrency market is moving
The cryptocurrency market, which has barely moved since September 19, hasn't seen any major changes since Tuesday. The total market capitalization of cryptocurrencies increased by 5.36% to $928 billion, up $47.41 billion.
Although the market cap is still far from $1 trillion, the psychological level has historically proven to be a reversal zone.
Market capitalization of cryptocurrencies
However, the presence of a black Parabolic SAR dot below the candle indicates an active uptrend that could push the market cap to $1 trillion if sustained.