The recent dip in cryptocurrency market might be a tangible sign that things may have turned sour and that the hype might eventually come to an end, but it is actually the regulatory aspects that need to be focused on. For this reason, the G20 member states have passed a declaration to create an international taxation system for digital assets, a Japan-based news outlet jiji.com reported.
According to the report, the G20 leaders are looking forward to putting in place an international taxation system and policies that will help to prevent money laundering.
The article stipulates that the current laws make it difficult to request tax from foreign-based companies, companies that don’t have an office or physical addresses in Japan. And Japan is not the only country that is having a challenge with this. International laws usually don’t allow nations to tax foreign organizations that don’t have physical locations in that particular country.
The G20 member state which met in Buenos Aires Argentina last weekend is allegedly working on the proposal and will complete it next year’s summit when Japan will preside over the event. Each member state is now required to submit their proposals. And the new law is expected to be effected by 2020.
In July, France’s Minister Bruno Le Maire called for a public discussion for the rapid growth of cryptocurrency industry at the G20 Summit in Argentina.
The explosion of cryptocurrencies has arguably created significant challenges for regulators across the world. The issue of how to regulate virtual tokens and Initial Coin Offerings (ICOs) using existing financial laws is becoming increasingly problematic.
The current frameworks are not sufficient for dealing with this new form of currency. And, most analysts believe the industry has passed the point of no return. In other words, digital currency and the technology that underpins it are here to stay.