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Tax Office to Contact 350,000 Australians and Remind Them to Report All Crypto Profits

12/03/2020 by Idelto Editor

Australian tax agents have set out to close a gap they say costs the state several billion dollars. Taxpayers who file various work-related claims and investment property deductions or declare income from sharing economy platforms such as Uber and Airbnb may be asked for explanations and receipts. Investors and traders earning income from cryptocurrencies are also among the targeted.

Also read: Australia Crypto Merchant Trade Sets $74K Monthly Record With BCH Capturing 97%

Crypto Investors Advised to Keep Detailed Records of All Transactions

The revenue service has started contacting hundreds of thousands of Australians via mail and email to remind them of the tax obligations that come with cryptocurrency trading. A spokesman for the Australian Taxation Office (ATO) told News.com.au that people who sold cryptocurrency during the 2017/18 financial year may be asked to review their tax returns. Those who fail to correct any established discrepancies can be audited and risk penalties. The official stated:

Over the next two months we expect to contact as many as 350,000 individuals who have traded in cryptocurrency in the last few years.

Taxpayers who only held crypto but didn’t trade will be updated about the information they are required to gather. Investors should keep detailed records including receipts of purchase or transfer of cryptocurrency, exchange and digital wallet records, the date and the value of each transaction in Australian dollars at the time it took place. They should also be able to explain the purpose of each transaction and identify other involved parties.

Financial gains from trading and exchanging crypto as well as from converting it into local or foreign fiat is subject to capital gains tax in Australia, where cryptocurrency is considered a property-like asset for tax purposes. The country has advanced in its efforts to regulate the crypto space further than other nations. It has over 300 registered digital asset exchanges, as news.Bitcoin.com reported last month. A recent court ruling added another layer of legitimacy describing cryptocurrencies as “a recognized form of investment.”

ATO Gets Its Information From Cryptocurrency Exchanges

The Australian Taxation Office has a dedicated page on its website that details the tax treatment of cryptocurrencies in the country. Last year, the administration published its Cryptocurrency Data Matching Protocol covering the financial years between 2014/15 and 2019/20. The program was introduced to obtain transaction data from exchanges on taxpayers who have bought and sold cryptocurrency, the ATO representative pointed out and further commented:

Our campaign is designed to help raise awareness and give people the opportunity to fix any mistakes.

The tax service has estimated that up to a million people in Australia have bought and sold cryptocurrency. Many of them might not have realized the tax implications and simply failed to report the profits on their tax returns. Others may have thought that the ATO does not have the means to track these transactions which are conducted online and often involve foreign currency. As the agency now gets its information directly from cryptocurrency exchanges, however, this assumption does not hold up.

What’s your opinion about the tax campaign targeting crypto investors in Australia? Share your thoughts on the subject in the comments section below.

Disclaimer: This article is for informational purposes only. It is not an offer or solicitation of an offer to buy or sell, or a recommendation, endorsement, or sponsorship of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

Images courtesy of Shutterstock.

Do you need to track down a Bitcoin transaction? With our Bitcoin Explorer tool, you can search by transaction ID, address, or block hash to find specific details, and for a look at the broader crypto space explore our Bitcoin Charts tool.

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Australia Crypto Merchant Trade Sets $74K Monthly Record With BCH Capturing 97%

04/03/2020 by Idelto Editor

Australia Crypto Merchant Trade Sets Monthly Record at $74K With BCH Capturing 97% of Spending, Report Details

Cryptocurrency payments in Australia, which have been growing in volume in the past few years, have recently scored another record. Crypto-based merchant trade across the country reached almost $74,000 in February according to a new report. Bitcoin cash has by far the largest share in retail crypto spending and transactions among coins accepted by Australian businesses.

Also read: Australian Court Accepts Cryptocurrency Exchange Account as Security for Legal Costs

Bitcoin Cash Accounts for 97% of Retail Cryptocurrency Spending in Australia

Part of a series of regular monthly surveys, the new edition of Bitcoinbch.com’s Cryptocurrency Expenditure at Retail Businesses report highlights the importance of merchant adoption for any cryptocurrency designed to become a global electronic cash system. The study examines how bitcoin cash (BCH) and other leading cryptocurrencies perform in terms of spending at physical merchants in Australia.

According to the latest numbers, total cryptocurrency trade has increased in February 2020, reaching a volume of $73,769.41, up from $44,087.57 in January. Bitcoin cash usage expanded last month to a record proportion of 97.01% of all merchant trade covered in the study, up from 90% in October and 93% in November respectively. BCH accounts for over $71,500 of the quoted monthly spending volume.

The information about BCH spending is gathered from subscribers to the Hula platform. The Hockings Underwriting Logistics App facilitates instant conversion of bitcoin cash to local fiat currency, protecting businesses from price volatility. Hula pairs BCH investors with merchants to enable a simple way to accumulate BCH over the counter. Its service is currently available to Australian retailers who want to accept the cryptocurrency.

Bitcoinbch.com collects data by polling physical merchants across the nation as well. This approach allows the web portal to create a more precise picture of their turnover, which in the case of BCH is often of a peer-to-peer nature. Many of the retail locations also use other products developed to facilitate bitcoin cash storage and payments, such as the Bitcoin.com Wallet and the Bitcoin Cash Register app.

Over 81% of Australia’s Retail Crypto Transactions Conducted in BCH

The report also tracks the usage of other major cryptocurrencies sourcing information from Australian crypto payment processor Travelbybit. Author Hayden Otto, CEO of Bitcoinbch.com, concludes that their proportions in the mix have shrunk last month. Bitcoin core and Lightning Network, ethereum, litecoin, and crypto exchange Binance’s BNB token collectively accounted for only $2,205 of the estimated sales total.

Bitcoin cash leads in terms of retail crypto transactions too, with 193 or 81.09% of all registered in the month of February, followed by BTC with 17 transactions (7.14%) and Lightning Network’s 14 (5.88%), BNB with 10 (4.20%), ETH and LTC with two each (0.84%), while BSV and DASH have not been spent with the surveyed merchants. BCH transactions have spiked on the 13th and towards the end of the month with a period high on Feb. 27. The volume of bitcoin cash spending topped $12,000 on the 24th.

Australia has become an important crypto destination with an increasing number of online merchants and physical stores accepting decentralized money thanks to services such as those described in the report. Cryptocurrencies have also gained recognition through the registration of hundreds of digital asset exchanges and a recent court ruling describing them as a form of investment. Bitcoinbch.com’s regular monthly surveys show that bitcoin cash is a major driver of adoption with a growing list of businesses accepting it as a payment option that works for them and their customers.

What do you think about the numbers in the Bitcoinbch.com’s cryptocurrency expenditure report? Do you expect the positive trend from February to continue into March? Share your thoughts on cryptocurrency adoption in Australia in the comments section below.

Images courtesy of Shutterstock, Bitcoinbch.com.

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Shopify Joins Libra While Quitter Vodafone Advertises Bitcoin on Facebook

24/02/2020 by Idelto Editor

Facebook’s coin project, Libra, continues to draw attention despite setbacks, including a shrinking pool of backers and a growing number of worried regulators. But now with JP Morgan seeing potential for the social network’s cryptocurrency and e-commerce giant Shopify joining the Libra Association, its chances might have improved. Although, assuring governments that Libra won’t undermine their monetary authority and convincing users of its utility remain key challenges.

Also read: Fed Chair Powell Reveals US Response to China’s Digital Yuan, Libra, Public Payments Ledger

Vodafone Posts Facebook Ad With Bitcoin in Germany

Libra’s long list of supporters has shortened in the past few months with major players such as Visa, Mastercard, Ebay, and Paypal leaving the Libra Association after it became clear that the project is facing major regulatory hurdles. Online payment processor Stripe, travel website Booking Holdings and the South American online sales platform Mercado Pago are also among the quitters.

Vodafone pulled out of the project last month becoming the eighth company to do so. The telecom giant, which operates in two dozen countries and serves clients in many more, recently spurred social network discussions and speculation in crypto media with a move that some took as an indication of its future plans. On Friday, Vodafone posted a Facebook ad in German that shows a bitcoin and the following message:

Will there be bitcoins instead of pocket money soon? What should grandma give you if everyone will pay with their smartphone in the future?

Vodafone left Libra to focus on M-Pesa, its own digital payments platform. Launched in 2007 by its Kenyan associate Safaricom, M-Pesa has established itself as the leading mobile money service in Africa. It now has 37 million active users in seven countries in the region, who carried out over 11 billion transactions in 2019. But it does not support Bitcoin, not yet.

Swimming Against the Current, Shopify Bets on Libra

Not everyone is leaving Libra, though. In fact, the majority of founding members are still on board. The updated list published recently by the Telegraph features the names of companies from various sectors including Facebook’s subsidiary Calibra, crypto firms Coinbase, Anchorage, Bison Trails, Xapo Holdings, and also Uber, Lyft, Spotify, Farfetch, Payu, Iliad, Andreessen Horowitz, Breakthrough Initiatives, Ribbit Capital, Thrive Capital, Union Square Ventures, Creative Destruction Lab, Kiva, and even NGOs like Mercy Corps and Women’s World Banking.

Shopify, the Canadian e-commerce platform, became the latest enthusiast to join the club. The company, which offers services and solutions for over a million small merchants and online retailers, announced its decision to become a member on Feb. 21, pledging to invest $10 million in the project. “We spend a lot of our time thinking about how to make commerce better in parts of the world where money and banking could be far better,” Shopify stated in a blog post, adding: “As a member of the Libra Association, we will work collectively to build a payment network that makes money easier to access and supports merchants and consumers everywhere.”

Having announced it last June, it remains unclear whether Facebook will be able to launch Libra in the first half of 2020, as initially planned, or even by the end of this year. Both Facebook founder Mark Zuckerberg and the head of Calibra David Marcus have already answered questions in the United States Congress about the social media giant’s plans for the project, in an effort to alleviate concerns expressed by policy makers who fear Libra could undermine the U.S. dollar and challenge its supremacy as a global currency.

Antitrust regulators in Europe have been investigating the project as well. A new memo issued by the Vice-President of the European Commission (EC) Valdis Dombrovskis reveals Brussels is unhappy that the available information on Libra “lacks detail” and even after additional questions were sent to the association, it “remains insufficient for determining the precise nature of Libra” and its relation with existing EU law. “Libra is still a project, and thereby a moving target,” Dombrovskis notes and reminds about the Dec. 5 joint statement of the Commission and the Council of the European Union recognizing the risks raised by stablecoins and the need for regulation and oversight. The EC is currently gathering feedback from citizens and organizations to establish a regulatory framework, one of the goals of which is to “harness the potential opportunities that crypto-assets may offer.”

JP Morgan Recognizes Maturing Crypto Market but Sees Focus Shifting Towards Stablecoins

In its annual report on blockchain and cryptocurrency developments, JP Morgan Chase acknowledges that the crypto market continues to mature but notes that the characteristic volatility of cryptocurrencies remains an impediment to broader adoption. One that has also “led focus towards stablecoins.” The multinational investment bank, which issued its own digital coin representing fiat currency to facilitate payments between clients, believes that stablecoins have the potential to grow substantially in global transactions, despite certain challenges with operating such payment systems. The authors of the study point out:

While the world is ready for private money in our view, rapid adoption and scale are hindered by the underlying technology and the need for substantial regulatory oversight.

JPMC also notes that financial inclusion is one of the motivations behind Libra and that if the unbanked consumers were to drive the growth of the cryptocurrency, the project would be more about peer-to-peer payments and could support a significant share of global transactions. Currently, the global economic activity is far more concentrated among countries with higher levels of inclusion, according to data from the World Bank quoted in the report. For a stablecoin like Libra to succeed, the bank elaborates, it would require a few changes to its design such as “some short-term liquidity facilities, a source of positive-yielding reserve assets, and less distributed, semi-private networks.”

What are your expectations about the future of Facebook’s Libra project? Share your opinion in the comments section below.

Images courtesy of Shutterstock.

Do you want to dig deeper into Bitcoin? Explore past and present cryptocurrency prices through our Bitcoin Markets tool and head to our Blockchain Explorer to view specific transactions, addresses, and blocks.

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Tradeblock Estimates Post-Halving Mining Cost of $12,500 per BTC

15/02/2020 by Idelto Editor

Tradeblock Report Estimates Bitcoin's Post-Halving Cost at $12,500 per BTC

On February 7, the blockchain analytics provider Tradeblock published a report about the upcoming BTC reward halving. BTC’s block reward is expected to halve on or around May 12, 2020, and Tradeblock’s report estimates that the cost to mine BTC will be over $12,500 after the halving.

Also Read: The Controversial S2F Model Predicts Bitcoin Price Will Reach 100,000 USD Within 2 Years

BTC’s Price Must Rise According to Post-Halving Cost Estimate

The great reward halving of 2020 is coming and the discussion about this topic has intrigued crypto supporters. BTC, the largest blockchain network by market capitalization, will see a reward halving on or around May 12, 2020.

This means a miner who finds a block on the network will only get 6.25 BTC, in comparison to today’s 12.5 BTC reward. Of course, the BTC reward halving has prompted intense speculation on whether the price will rise prior to the halving and remain profitable to mine after the event as well. Across social media platforms and crypto-focused forums, individuals have been debating the subject regularly. Additionally, there’s been various studies done on the subject and Tradeblock recently published the firm’s thoughts on the upcoming BTC reward halving and estimated post-halving cost.

Tradeblock Estimates Post-Halving Mining Cost of $12,500 per BTC — Figure 1 from Tradeblock’s report shows BTC’s network hashrate and difficulty hit new all-time highs.

The blockchain analytics provider emphasized that the post-halving cost should be around $12,525. “In our latest estimates, we projected that commercial mining operators were likely operating at healthy profit margins as the price of bitcoin increased throughout 2019 (albeit with bouts of volatility over the year),” Tradeblock’s researchers noted. “However, the network hash rate has continued on a record run, making new highs nearly each week.” They added:

Hash rate increases as the number of resources, in aggregate, committed to securing the network through mining activities rises. As resources dedicated to mining rise over time, efficiency gains and/or mining costs rise. As such, in order to maintain healthy profit margins for miners, a rising hash rate is typically needed to correspond with a rising bitcoin price.

Analysts and Controversial Stock-to-Flow Charts Show the Halving Could Propel BTC’s Price to $100K

Tradeblock stressed that the gross cost to mine a single BTC after the halving would need to be around $15,062 per coin. However, by adjusting the assumption that hashrate remains relatively flat then the cost would drop to $12,525 per BTC. “It is important to note, however, that large scale commercial mining pools such as those operated by Bitmain will likely have a lower device price point as they will be utilizing Antminer devices at cost,” Tradeblock’s report highlights. “As such, this would allow breakeven costs to be somewhat lower than the above estimates.”

The Tradeblock report follows the report published in September by Bayerische Landesbank (Bavarian State Bank), which estimated BTC prices could touch $90,000 soon. The report’s estimates and reasoning derive from speculation concerning the reward halving and the controversial stock-to-flow (S2F) system. News.Bitcoin.com recently reported on how a few S2F charts show a possible climb to the $100K mark. Traders who wholeheartedly believe in S2F technical analysis think that the reward halving is one of the biggest reasons why the $100K price is achievable. Additionally, onchain data indicates that BTC miners are hoarding coins as the difference between freshly generated coins and their first spends have consistent gaps week after week.

Tradeblock’s report assumes miners will continue to expend resources in order to secure the network despite the reward halving. The study’s data suggests that the “cost (per mined btc) increase following the halving” will surely happen, but the rise in price is theoretical. “This suggests that miners are likely expecting the price of bitcoin to rise to higher levels (above ~$12,000-15,000 per BTC) around the halving allowing them to continue to generate a profit, or they likely will look to reduce resources following the halving resulting in a hash rate decline as profitability falls,” Tradeblock’s report concludes. If the price of bitcoin means it is not profitable to mine after the BTC halving in May, significant miner capitulation could occur.

What do you think about the BTC reward halving? Do you think the price is already priced in or do you expect BTC to rise just before the halving? Let us know what you think about this subject in the comments section below.

Disclaimer: This article is for informational purposes only. It is not an offer or solicitation of an offer to buy or sell, or a recommendation, endorsement, or sponsorship of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article. Price articles and market updates are intended for informational purposes only and should not be considered as trading advice. Neither Bitcoin.com nor the author is responsible for any losses or gains, as the ultimate decision to conduct a trade is made by the reader.

Image credits: Shutterstock, Wiki Commons, Twitter, Tradeblock report, bitcoinblockhalf.com, Bytetree, and Pixabay.

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Digital Remittances Reach Record High of $96 Billion, Fees Charged by Traditional Providers Open Door for Cryptocurrencies

14/02/2020 by Idelto Editor

In a globalized world where labor follows capital, the remittance industry has been growing constantly in both volume and users. Traditional providers like banks and money transfer companies have been charging high fees for their services which creates opportunities for alternative digital platforms and decentralized cryptocurrencies.

Also read: Russians Can Use Qiwi, Sberbank, Yandex Money and Now Binance P2P Exchange to Buy Bitcoin With Rubles

Digital Remittance Volume Projected to Touch $143 Billion by 2023

According to numbers gathered by market data provider Statista, the total transaction value of digital remittances, cross-border transfers made over the internet, has reached almost $95.96 billion in 2020, representing a year-over-year increase of more than 21%. At the same time, the number of users in this segment of the remittance market has been estimated at 8.5 million (+20.5% yoy). Both indicators are projected to increase by 2023, to over $143 billion in volume and 13.2 million users.

Last year, the largest share of users (32%) were between 25 and 34 years old, and another 25% were aged 35-44 years, a majority from labor-active age groups. The average annual transaction value per user in the digital remittances segment amounts to a little over $11,233 according to the data released this year. Five countries, United States, Switzerland, Saudi Arabia, Germany, and China, top the transaction value comparison chart. With a total transaction value of $21.297 billion, the U.S. is the pronounced global leader and Switzerland comes in second with $7.969 billion.

Total transaction value in the digital remittances segment, Source: Statista — Global comparison, transaction value. Source: Statista

The authors of the report note that remittances often occur on a regular basis and most of the user groups are not inclined to change their fund transfer provider very often. The sector is dominated by established service providers such as banks, post offices and money transfer processors like Western Union and Moneygram. The relatively high fees they charge has opened the way for alternative platforms such as Transferwise, Worldremit and Remitly, Statista points out, which have managed to cut costs by optimizing the use of digital infrastructures.

Ripple’s Latest Remittance Service Agreements Turn the Tide for XRP

While there have been various developments around XRP recently, some of them have influenced its market in a positive way. Two partnerships have been announced this month in which Ripple, the company associated with the cryptocurrency, will be providing remittance services. The price of XRP, the third largest cryptocurrency by market capitalization, spiked over the past couple of days, from a low of $0.2678 on Feb. 11 to a high of $0.3288 early on Feb. 13. Although the crypto lost some of the gains later on Thursday, the price jump is remarkable as it comes after a difficult year for one of the top coins.

According to media reports this week, the National Bank of Egypt (NBE), the country’s largest financial institution by assets and branches, has signed a cooperation agreement with Ripple to open a new channel for receiving remittances from Egyptians that live and work abroad. The bank said it wanted to employ Ripple’s blockchain solutions to further develop its remittance business supporting transfers from around the world and particularly the Gulf region.

The Egyptian deal follows another similar agreement announced by Ripple earlier in February. The company revealed it’s going to work with International Money Express (Intermex), a leading remittance services provider focusing on Latin America and the Caribbean corridor, to address the challenges with slow and expensive cross-border payments. Intermex plans to leverage Ripplenet for faster remittances between the United States and Mexico. Ripple claims the network links over 300 banks and financial institutions globally.

According to the World Bank, Mexico ranks third among countries with the highest number of remittance recipients. Data published by Banco de México, the nation’s central bank, shows that Mexican emigrants have sent home a record $36 billion in 2019, a 7% increase over the previous year’s almost $33.7 billion. Most of the money, a large portion of which comes from the U.S., has been transferred electronically and in small transactions averaging around $300. Intermex is one of the largest money remitters between the two countries processing more than $30 million in transactions annually.

The status quo in the digital segment of the remittance market undoubtedly creates opportunities for decentralized cryptocurrencies as well. Transaction fees in the case of bitcoin cash (BCH), for example, are less than a cent per transfer. Certain regions can benefit significantly – a 2019 report by the World Bank revealed that the average cost to send the equivalent of $200 to Sub-Saharan Africa is 9.3% of the transferred value, as news.Bitcoin.com reported last year. In 2018, African expatriates sent $46 billion to their home countries.

What are your expectations about the future of the remittance industry? Share your thoughts in the comments section below.

Images courtesy of Shutterstock, Statista.

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