Blockchain
Crypto Asset Tax: Competitiveness and Industrial Growth in Indonesia
The crypto asset market, which previously experienced a high transaction volume, faced a significant decline in 2023. In this article, Asosiasi Blockchain Indonesia will review the causes of this shrinkage in depth, analyze the latest data, explore responses from business actors and government bodies, and underline the factors influencing the dynamics of the crypto asset market.
The Decrease in Crypto Asset Transactions and Its Causes
The decrease in crypto asset transactions has captured worldwide attention, fueling intense discussions within the market. Several issues, such as the collapse of FTX in 2022 and lawsuits from the U.S. Securities & Exchange Commission (SEC) against Binance and Coinbase. These issues are seen as catalysts for the diminishing consumer interest in crypto assets on a global scale, consequently leading to a notable decrease in transactions within the Indonesian market.
As known, the Bitcoin value in the global crypto market has once again been recorded at US$44k or around IDR 683 million, reaching its highest level for the first time since April 2022. Data from the Commodity Futures Trading Supervisory Agency (Bappebti) shows that the value of crypto asset transactions from January to November 2023 has reached IDR 122 trillion. Despite the rise in Bitcoin value, this figure indicates a significant decrease compared to the previous year, which reached IDR 306.4 trillion and is even much lower than the peak period in 2021, which reached IDR 859.4 trillion. The question remains: What factors caused the decrease in transaction volume?
Various complex factors contribute to this decline. “The reason is that the peak period has passed, interest has waned, and the real sector at that time was not yet thriving due to the pandemic”, said Hasan Fawzi, Chief Executive Supervisor of the Financial Sector Technology Innovation, Digital Financial Assets, and Crypto Assets Sector, and concurrently Member of the OJK Board of Commissioners. According to CNBC Indonesia, OJK explained that high tax rates were one of the causes behind the decline in crypto asset transaction volume.
Crypto Asset Tax
Since May 2022, every crypto transaction in Indonesia has been subject to a Value Added Tax (VAT) of 0.11% of the transaction value for exchanges registered with Bappebti and an Income Tax (PPh) of 0.1%. Let’s explore how crypto asset transaction costs compare between registered and unregistered exchanges under Bappebti. Here’s an illustration:
|
Comparison of Crypto Asset Transaction Fees |
|
|
Registered Exchanges under Bappebti |
Unregistered under Bappebti |
Total commission per transaction |
Total transaction costs (including tax): 0.00% – 0.1% |
*This is an example of a general overview of transaction fees – each exchange can have a different percentage
The data above shows a significant difference in the total transaction costs on registered exchanges, which tend to be higher. When designing tax policies for crypto assets, it is crucial to consider the overall impact on the industry’s growth.
In response to this challenge, Daniel Sukamto, CEO of digitalexchange.id, expressed, “It is hoped that there will be an adjustment to tax rates that will not burden the users”. Oscar Darmawan, CEO of Indodax, also added, “This is to ensure that users can make transactions more freely without feeling burdened”. This effort is anticipated to positively stimulate the increased tax revenues, as users will likely conduct more transactions on officially registered crypto asset industry platforms in Indonesia.
Implementing taxes on crypto assets positively impacts the industry, as a significant contributor to the Indonesian economy. Moreover, this will create transparency and support the industry’s sustainability at the national level. “With the implementation of more competitive and cooperative tax policies, it is hoped that this will result in more increased transactions,” said Robby, Chairman of the Indonesian Blockchain & Crypto Asset Traders Association (A-B-I & Aspakrindo).
Solutions for Crypto Asset Tax
In addition to adjusting tax rates, the Association hopes to have the opportunity to discuss with the Directorate General of Taxes (DJP) to provide an overview and find mutually beneficial solutions to ensure the crypto industry’s growth in Indonesia and optimize tax revenues. Yudhono Rawis, CEO of Tokocrypto, conveyed several examples of concrete solutions, including:
- Adjusting crypto asset tax rates to make transaction fees more competitive for customers on registered exchanges.
- Implementing a tax amnesty program for taxpayers with crypto assets abroad to increase crypto tax revenues in Indonesia.
Not only that, Asih Karnengsih, Executive Director of A-B-I & Aspakrindo, also presented several other solutions:
- As Law No. 4 of 2023 concerning Strengthening and Development of the Financial Sector (UU PPSK) classifies crypto assets as digital financial assets, there could be an exemption from VAT collection. This aligns with Law No. 7 of 2021 concerning Harmonization of Tax Regulations (UU HPP) and Law No. 42 of 2009 (VAT Law), where financial services are exempted from VAT collection.
- Enforcing tax implementation for unregistered exchanges in Indonesia, as regulated in the Minister of Finance Regulation (PMK) Number 68 of 2022, with a VAT rate of 0.22% and Income Tax (PPh) of 0.2%. This aims to encourage domestic customers to transact on registered exchanges.
Apart from Taxes, How to Encourage the Increased Crypto Transactions?
Bappebti also highlighted their views and solutions regarding the decline in crypto asset transaction volume due to implementing the crypto asset tax. In response, Bappebti will coordinate with the Directorate General of Taxes (DJP) to implement equal treatment in the tax collection for customers who transact on unregistered exchanges.
Not only that, Bappebti said that other initiatives are being pursued to encourage an increase in crypto transactions, such as the establishment of Self-Regulatory Organizations and expanding the services offered by exchanges, such as staking, the development of crypto assets in the form of futures products, evaluate and improve the regulations related to crypto assets, including simplifying the Analytical Hierarchy Process (AHP) method for selecting crypto assets that can be traded in Indonesia. This aims to stimulate an increase in the quantity of types of crypto assets that can be traded without reducing current assessment standards. Kasan, Acting Head of Bappebti, emphasized, “With a more varied selection of crypto asset options, it is hoped to boost public interest.”
The Association has also initiated many discussion forums between business actors and the government, to ensure that the implemented regulations can support the needs and development of the industry. The topics revolve around consumer protection and the competitiveness of domestic business actors. For the initiative, Mobee’s COO & CFO, Methodius Anwir, hopes policymakers can prioritize global insight in drafting regulations to create a competitive industry. This way, all parties can share the same vision in overcoming challenges and creating new opportunities for the sustainable growth of the crypto asset industry.
SOURCE Asosiasi Blockchain Indonesia
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Blockchain
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Blockchain
Ethereum ETFs Aren’t Blockchain But Is A Revolutionary Tech: Top 6 Amazing Reasons To Invest In Them
The financial landscape is rapidly evolving, with the integration of blockchain technology and cryptocurrencies becoming more prominent. Among these, Ethereum ETFs (Exchange-Traded Funds) have emerged as a significant investment vehicle, offering exposure to the Ethereum blockchain’s native cryptocurrency, Ether (ETH), without requiring direct ownership. However, it’s crucial to understand that Ethereum ETFs are distinct from the blockchain itself and serve different purposes in the investment world.
Understanding Ethereum and ETFs
Ethereum: A decentralized platform that enables the creation and execution of smart contracts and decentralized applications (dApps). It operates using its cryptocurrency, Ether (ETH), which fuels the network.
ETF (Exchange-Traded Fund): A type of investment fund that holds a collection of assets and is traded on stock exchanges. ETFs can include various asset classes, such as stocks, commodities, or bonds.
Ethereum ETFs: The Intersection of Traditional Finance and Cryptocurrency
An Ethereum ETF provides a way for investors to gain exposure to the price movements of Ether without directly purchasing the cryptocurrency. This is achieved through an ETF structure, where the fund holds assets linked to the value of Ether, and investors can buy shares of the ETF on traditional stock exchanges.
Key Features of Ethereum ETFs:
- Indirect Exposure: Investors gain exposure to Ether’s price changes without needing to manage or store the cryptocurrency themselves.
- Regulatory Compliance: Unlike the relatively unregulated cryptocurrency market, ETFs operate under the oversight of financial regulators, offering a layer of investor protection.
- Accessibility: Ethereum ETFs are available through traditional brokerage platforms, making them accessible to a broader range of investors.
Why Invest in an Ethereum ETF?
- Diversification: Including an Ethereum ETF in a portfolio can provide exposure to the cryptocurrency market, potentially enhancing diversification beyond traditional assets.
- Convenience and Familiarity: ETFs are a familiar investment product, simplifying the process of investing in cryptocurrencies.
- Professional Management: ETF managers handle the investment decisions, including the buying and selling of assets, which can be advantageous for those less familiar with the cryptocurrency space.
- Regulatory Oversight: ETFs are subject to regulatory scrutiny, potentially offering more safety and transparency compared to direct cryptocurrency investments.
- Potential for Growth: As the cryptocurrency market grows, ETFs linked to assets like Ether may benefit from rising prices.
Key Differences Between Ethereum and Ethereum ETFs
While both are related to the Ethereum blockchain, Ethereum itself and Ethereum ETFs represent different forms of investment:
- Ethereum (ETH):
- Direct ownership of the cryptocurrency.
- Full exposure to Ethereum’s features, including staking and network participation.
- Traded on cryptocurrency exchanges.
- Highly volatile and largely unregulated.
- Ethereum ETF:
- Indirect exposure through shares representing Ether’s value.
- Traded on traditional stock exchanges under regulatory oversight.
- Offers a more stable and familiar investment structure.
- Typically lower volatility compared to direct cryptocurrency ownership.
Future Considerations for Ethereum ETFs
The approval and launch of Ethereum ETFs mark a significant milestone in bringing cryptocurrencies closer to mainstream finance. They offer a convenient and regulated means for investors to gain exposure to the growing digital assets market. However, they also come with limitations, such as not allowing direct participation in the Ethereum ecosystem’s innovations, like dApps and smart contracts.
As the market evolves, we may see more sophisticated financial products that better capture the full potential of the Ethereum ecosystem. For now, Ethereum ETFs provide a balanced option for those interested in cryptocurrency exposure within the framework of traditional finance.
In conclusion, while Ethereum ETFs offer a gateway into the world of digital assets, they should be viewed as complementary to, rather than a replacement for, direct investment in the underlying blockchain technologies. Investors should carefully consider their investment goals, risk tolerance, and the unique attributes of both Ethereum and Ethereum ETFs when making investment decisions.
Source: blockchainmagazine.net
The post Ethereum ETFs Aren’t Blockchain But Is A Revolutionary Tech: Top 6 Amazing Reasons To Invest In Them appeared first on HIPTHER Alerts.
Nexo, a leading institution in the digital assets industry, has reinforced its commitment to data security by renewing its SOC 2 Type 2 audit and attaining a new SOC 3 Type 2 assessment without any exceptions. This rigorous audit process, conducted by A-LIGN, a respected independent auditor specializing in security compliance, confirms Nexo’s adherence to stringent Trust Service Criteria for Security and Confidentiality.
Key Achievements and Certifications
- SOC 2 and SOC 3 Compliance:
- SOC 2 Type 2: This audit evaluates and reports on the effectiveness of an organization’s controls over data security, particularly focusing on the confidentiality, integrity, and availability of systems and data.
- SOC 3 Type 2: This public-facing report provides a summary of SOC 2 findings, offering assurance to customers and stakeholders about the robustness of Nexo’s data security practices.
- Additional Trust Service Criteria:
- Nexo expanded the scope of these audits to include Confidentiality, showcasing a deep commitment to protecting user data.
- Security Certifications:
- The company also adheres to the CCSS Level 3 Cryptocurrency Security Standard, and holds ISO 27001, ISO 27017, and ISO 27018 certifications, awarded by RINA. These certifications are benchmarks for security management and data privacy.
- CSA STAR Level 1 Certification:
- This certification demonstrates Nexo’s adherence to best practices in cloud security, further solidifying its position as a trusted partner in the digital assets sector.
Impact on Customers and Industry Standards
Nexo’s rigorous approach to data protection and compliance sets a high standard in the digital assets industry. By achieving these certifications, Nexo provides its over 7 million users across more than 200 jurisdictions with confidence in the security of their data. These achievements not only emphasize the company’s dedication to maintaining top-tier security standards but also highlight its proactive stance in fostering trust and transparency in digital asset management.
Nexo’s Broader Mission
As a premier institution for digital assets, Nexo offers a comprehensive suite of services, including advanced trading solutions, liquidity aggregation, and tax-efficient credit lines backed by digital assets. Since its inception, the company has processed over $130 billion, showcasing its significant impact and reliability in the global market.
In summary, Nexo’s successful completion of SOC 2 and SOC 3 audits, along with its comprehensive suite of certifications, underscores its commitment to the highest standards of data security and operational integrity. This dedication positions Nexo as a leader in the digital assets space, offering unparalleled security and peace of mind to its users.
Source: blockchainreporter.net
The post Nexo Reaffirms Commitment to Data Protection with SOC 3 and SOC 2 Compliance appeared first on HIPTHER Alerts.
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