It is now emerging that most G20 countries will likely consider cryptocurrencies assets. It really comes as no surprise as this is already a common theme in some countries. For instance, in Japan and Israel, all digital currency trades are subject to capital gains taxes and considered assets. In a G20 draft, Bloomberg reported that there is consensus. However,digital assets lack the three key properties that would otherwise categorize them as money.
The Central Bank heads and Finance Ministers’ meeting is ongoing in Buenos Aires, Argentina. Uniquely, this is actually the first G20 meeting where Bitcoin and crypto-assets is under discussion. Because of this, most high liquid cryptocurrencies continue to gain traction inevitably attracting calls for regulation.
This is in the wake of tax evasion concerns, outright scams and money laundering that gives the industry a bad name and forcing government intervention. With this new common tune, categorization of cryptocurrencies as taxable assets is definitely appealing for most governments.
The contentious issue of whether cryptocurrencies meets all the hallmarks of money will be under discussion today (Tuesday). Klaas Knot who chairs the Financial Stability Board of which Mark Carney, the Bank of England Governor, heads weighed in saying:
“Whether you call it crypto assets, crypto tokens — definitely not cryptocurrencies — let that be clear a message as far as I’m concerned. I don’t think any of these cryptos satisfy the three roles money plays in an economy.”
Understandably, this definition is an important milestone for this nascent crypto industry. Notably, this categorization be an avenue for government revenue. Besides, with a strong regulatory framework there is investor interest protection which in turn draws demand.
Obviously, we can see the effect of consensus on price. After Carney’s clarification that cryptocurrencies aren’t a threat to the economy, there was an across the board spike of cryptocurrencies. Bitcoin for example, saw a $1000 spike after the announcement.