Trump’s comment on cryptocurrency, a major positive

[Han Joongsub’s Bitcoin Behind] The recent tweet by President Donald Trump on bitcoin has become an issue. Those around me who still consider bitcoin a fraud ask if it will finally crash and burn with the tweet from Trump. But I believe Trump’s tweet is actually good news for the bitcoin ecosystem, largely because the direct mentioning of bitcoin by the President of the United States means its existence is something that can’t be ignored. The U.S. is well aware it can’t completely annihilate a digital currency that breaks all borders. As such, to minimize the damage and maximize national profit, it is trying to control the bitcoin ecosystem legally. I have broken down the points of Trump’s bitcoin tweets to three. #1 Institutionalization of crypto assets Let’s look at Trump’s tweet. “I am not a fan of Bitcoin and other Cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air. Unregulated Crypto Assets can facilitate unlawful behavior, including drug trade and other illegal activity…” The important keyword in the tweet is “unregulated crypto assets.” One can interpret that meaning that the U.S. does not see cryptocurrencies as a currency but as assets that needs to be regulated by the financial authorities. In fact, the finance ministers and central bank governors of the G20 uses the words “crypto asset.” Japan also has decided to adopt the crypto-asset terminology over virtual currency. The U.S. SEC has early on has been building the foundation for institutionalization by using the “digital asset” terminology. But Korea maintains its position that virtual currencies and blockchain are entirely separate. #2 Tax Once bitcoin is categorized legally as a financial asset, it is natural for it to be taxed. According to IRS internal documents recently leaked, the IRS is considering the use of social media to track down those who own crypto and don’t pay their taxes. Additionally, the IRS recently started sending warning letters to U.S. crypto-asset investors advising them to pay their taxes. The issue of taxing crypto assets is handled differently in different countries. But once the institutionalization of crypto assets becomes the global standard, crypto-asset holders will have to pay their dues. As Benjamin Franklin once said, nothing can be certain except death and taxes. #3 Big tech companies The U.S. government has recently started antitrust investigations into big-tech companies, including Google, Amazon, Facebook and Apple. Facebook in agreeing to paying a $5 billion fine for privacy breaches also said its crypto currency Libra will follow regulations. Because finance is an industry of regulations, big tech companies have no other choice but to follow the orders of the regulatory authorities. And Wall Street banks using this opportunity will have to come up with their own strategy. Not only Facebook but other big tech companies are likely to expand into the financial industry using blockchain-based digital currencies. Will Wall Street and Silicon Valley compete in this market? Or will they continue this uneasy relationship. It will be interesting to see how it goes. Han Joongsub is the head of the research center of Chain Partners and the author of “Bitcoin empire.”

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