South Korea has decided to delay the introduction of its cryptocurrency capital gains tax by two years, giving the industry more time to prepare. Originally set to take effect in January 2025, the tax will now be implemented in 2027. The decision was announced after lawmakers reached an agreement amid ongoing political challenges and concerns about its impact on the market. Park Chan-dae, the floor leader of the Democratic Party of Korea, confirmed the agreement, stating, “We have decided on a two-year moratorium for the cryptocurrency tax proposed by the government.” The postponement was made despite earlier disagreements between political parties, with some favoring alternative solutions such as increasing tax-deductible thresholds instead of delaying the tax. Previously, the People’s Power Party had proposed delaying the tax until 2028, while the Democratic Party suggested raising the tax-free limit from 2.5 million won to 50 million won. However, both parties eventually agreed to push back the implementation date to 2027. This move allows lawmakers to further evaluate the potential effects of the tax and gives crypto traders more time to adjust. Once the law is enacted, South Korean investors will face a 20% tax on profits from cryptocurrency trading. The government initially planned to implement the tax in 2021 but postponed it multiple times, citing concerns about its possible negative impact on the local cryptocurrency market. The ongoing delays reflect the government’s cautious approach toward regulating this emerging sector. Park emphasized that while they agreed to delay the cryptocurrency tax, their party opposes reforms to inheritance and gift tax laws that would favor the wealthiest citizens. These proposed changes include reducing the inheritance tax rate from 50% to 40% and increasing deduction thresholds for beneficiaries. The latest delay provides an opportunity for both the government and the crypto industry to assess the broader implications of taxing digital asset gains. Traders now have until 2027 to prepare for the eventual implementation, ensuring they can adapt to the changes without undue disruption.

2024-12-03 13:10

The Euro Area is preparing for potential economic challenges as Donald Trump’s second term could bring renewed U.S. tariffs. The Institute of International Finance (IIF) estimates that these tariffs may reduce the Euro Area's GDP by 0.4%. This comes at a time when many European countries are still recovering from the pandemic and facing growing competition from China. According to the IIF, the economic impact could be “substantial,” particularly for nations heavily reliant on transatlantic trade. Germany, France , and Italy are expected to bear the brunt of these changes. Germany , the U.S.’s largest exporter in the Euro Area, faces zero economic growth for the second consecutive year. The country’s machinery and industrial goods exports could be significantly affected. Italy’s exports in similar sectors are also vulnerable. France, meanwhile, risks a 4% decline in exports from key industries such as aerospace and luxury goods over Trump’s term, according to the IIF. While the potential damage is clear, the timeline for implementing tariffs remains uncertain. Trump’s statements on trade policies often make headlines quickly, but the actual rollout of tariffs tends to take weeks or months. This lag depends on how actively the administration leverages tools like the International Emergency Economic Powers Act. “ Trump’s tariff threats and their execution don’t always align,” notes the IIF, pointing to his previous term when he backed down from a proposed tariff on Mexico after the country agreed to tougher border controls. Analysts also suggest that the impact of Trump’s plans will vary, with some initial threats being toned down or adjusted during negotiations. However, industries across Europe are bracing for potential disruptions, particularly as the U.S. administration hints at more protectionist policies. The situation remains fluid, and all eyes are on how these policies evolve in the coming months. European exporters and governments must navigate these uncertainties while balancing the need for economic recovery and competitive positioning on the global stage. As the new administration lays out its strategies, the Euro Area will be closely monitoring developments, including Trump’s communication channels like Truth Social, for further indications of policy direction.

2024-12-03 12:48

With just weeks before Donald Trump takes office as the 47th President of the United States, optimism in the crypto industry is growing. Many believe the new administration will bring friendlier regulations and a more supportive approach to digital assets. Coinbase’s Chief Policy Officer (CPO), Faryar Shirzad, recently stated that legislation related to the crypto sector could pass through Congress “fairly quickly” under the new administration. Shirzad told CNBC that a pro-crypto president and what he called the “most pro-crypto Congress in history” will help move key legislation forward. This shift, he said, will ensure that the voices of over 50 million Americans who own cryptocurrency are finally heard in policymaking. Shirzad expressed optimism about the Financial Innovation and Technology for the 21st Century Act (FIT21) and the Clarity for Payment Stablecoins Act of 2023. While he acknowledged the slim chance of these bills passing during the current lame-duck session, he expects “significant progress” and possible approval of both pieces of legislation in the coming year. These laws aim to provide clarity on market structures and stablecoin regulation, marking a critical step for the industry. January 20, 2025, is shaping up to be a turning point for crypto. Not only will Trump take office, but the crypto community will also see the exit of long-time critic Gary Gensler, the current Chairman of the Securities and Exchange Commission ( SEC ). Gensler has led a strict regulatory crackdown on crypto over the past three years, but his departure signals potential changes for the SEC. Trump, who endorsed crypto during his campaign, has promised to appoint someone aligned with his vision for the industry. Shirzad refrained from speculating on who Trump might pick as the new SEC chair but expressed confidence that the President will choose someone supportive of innovation. “If he selects a change-maker who shares his vision, it will be good for the industry, the U.S., and crypto users,” Shirzad said. The crypto sector is also celebrating its electoral success, with 298 industry-friendly candidates voted into Congress, a majority that advocates for a supportive environment for blockchain and digital assets. Coinbase executives, including CEO Brian Armstrong , have highlighted this as a victory for the industry and a sign that voters want change in how crypto is treated. With pro-crypto legislation on the horizon, the future of the industry looks promising. Supporters believe the incoming administration will bring clarity and growth opportunities, ensuring the U.S. remains a leader in financial innovation. The coming years may redefine the crypto landscape, driven by favorable policies and a renewed focus on innovation.

2024-12-03 12:39

Self-custody wallets give users full control over their digital assets, eliminating the need for intermediaries. They represent financial independence and privacy, key principles of the crypto ecosystem. However, governments are imposing tighter regulations on these wallets. For instance, Brazil has restricted stablecoin transfers to self-custody wallets, aiming to centralize financial oversight. This poses a significant challenge to the freedom these wallets provide. Unlike custodial wallets managed by third parties, self-custody wallets ensure users have complete ownership of their funds, safeguarding them from risks such as exchange failures, as seen in the FTX collapse. According to Hester Bruikman from MetaMask, self-custody wallets are crucial for enhancing financial sovereignty, security, and privacy. They enable users to transact directly, without relying on centralized entities, and offer protection against data collection practices. Despite their benefits, these wallets are criticized for being complex and risky for new users. Innovations like smart contract accounts (SCAs) are addressing these issues. SCAs replace the traditional single-key system with flexible recovery methods, such as passkeys or multi-party computation, making them more secure and user-friendly. Other advancements include gas fee abstraction, allowing transaction fees to be paid in any token, and session keys for smoother approvals. These improvements make it easier for users to manage their crypto safely and efficiently. However, regulatory challenges loom. Governments worldwide are tightening rules on self-custody wallets. Brazil’s Central Bank has introduced measures to block stablecoin transfers to these wallets, attempting to align crypto with traditional finance. Similarly, Europe’s MiCA framework enforces stricter anti-money laundering rules on transactions over $1,050 involving self-custody wallets. These regulations aim to combat financial crime but risk limiting the use of decentralized tools. This regulatory pressure is already slowing innovation, particularly in the United States, as Bruikman highlights. The US Treasury recently dropped a controversial 2020 proposal that would have imposed severe restrictions on self-custody wallets, including banning peer-to-peer transactions and requiring detailed reporting on all activities. While this was a victory for decentralization advocates , the ongoing push for regulation continues to challenge the principles of crypto. Self-custody wallets are more than tools for holding crypto; they symbolize financial freedom, particularly in regions with unstable economies like Brazil. They protect user privacy and enable participation in decentralized ecosystems like DeFi and gaming without intermediaries. These wallets are vital for maintaining crypto’s core promise of decentralization, but the path forward requires balancing oversight with autonomy. The future of self-custody wallets looks promising, thanks to technological advancements like SCAs and gas fee abstraction. Adoption is expected to grow, with the market projected to reach $3.5 billion by 2031, growing at an annual rate of 8%. Hybrid models blending autonomy with compliance could provide a solution to ongoing regulatory pressures. The crypto community must continue to innovate while advocating for tools that protect user sovereignty in an increasingly regulated landscape. Ultimately, self-custody wallets represent a crucial choice: Will you trust your crypto to an intermediary, or keep control in your hands?

2024-12-03 12:35

Arthur Hayes, the co-founder of BitMEX, is advocating for a return to the roots of initial coin offerings (ICOs), calling for a decentralized, retail-focused approach to crypto funding. In his manifesto, “How to Make ICOs Great Again,” Hayes critiques the current dominance of venture capital ( VC ) firms and centralized exchanges (CEXs), which he argues have sidelined retail investors in favor of institutional interests. Hayes highlights how today’s crypto landscape has strayed from its core principles of decentralization and community empowerment. He criticizes the influence of VCs and CEXs, which he likens to a "CEXually transmitted disease," for pushing projects toward inflated valuations that alienate ordinary investors. “Why did we forget that crypto was meant to empower retail investors?” Hayes asks. He identifies three key factors that have driven crypto’s success: decentralization as a counter to traditional power structures, revolutionary blockchain technology, and the speculative drive for financial gains. However, he argues that retail investors—the backbone of crypto’s meteoric rise—have been marginalized by projects that cater to institutional players. Meme coins, despite their speculative nature, represent a more inclusive model by allowing retail participants to take part in the market without gatekeepers. Hayes calls for a revival of ICOs as a solution. He sees them as a way to return power to communities by enabling direct fundraising and broad participation. While he acknowledges the failures of many 2017 ICOs , he argues that their speculative nature was a feature, not a flaw, allowing retail investors to aim for significant financial rewards. “Retail investors would rather take a risk on a small, decentralized project than invest in a heavily inflated VC-backed token,” Hayes explains. He outlines a roadmap to revitalize ICOs, emphasizing the importance of decentralization, faster token issuance, and better technology. Advances in blockchain infrastructure, like lower transaction costs and improved scalability, now make ICOs more viable. Non-custodial wallets and user-friendly platforms further reduce barriers to entry, enabling more people to participate. Hayes advocates for avoiding centralized platforms and VC-backed projects with high valuations and low circulating supply. Instead, he encourages the community to embrace the speculative and democratic nature of decentralized ICOs. “It’s time to reject VC dominance and return to a system where retail investors can dream big and take bold risks ,” he concludes. With the market showing signs of entering a new bull cycle, Hayes predicts a resurgence of ICOs driven by retail investors and decentralized platforms like Pump.fun and Spot.dog. These tools, he believes, will empower a new wave of innovation, restoring crypto’s spirit of experimentation and financial inclusion.

2024-12-03 12:28