The cryptocurrency boom has established itself as a phenomenon of these times. It is consistently advancing along a straight path that will lead them to become significant players in the financial market. For more info, visit bitcoin system.
Bitcoin is gradually gaining favor with investors, but it has not been legitimized. Suspicions of being used to finance illegal activities, hide money and launder haunt cryptocurrency at a time of moves against tax havens
The level of anonymity that bitcoin provides tempts more than one with opaque purposes.
What is a tax haven?
A tax haven is considered the territory or State that applies a particularly favorable tax regime to non-resident citizens and companies that have their legal domicile in it.
Tax havens are among the most used instruments by people and companies that practice tax avoidance and evasion.
But with wealth comes taxes, and with them, some discontent.
It should be noted that even 12 years after the appearance of bitcoin, digital currencies have burst onto the market with a vocation for permanence.
Likewise, the investment made by Tesla and MasterCard and the creation of a division specializing in virtual currencies by the oldest financial institution in the United States, Bank of NY Mellon, shot up to its value.
After these bets, bitcoin is experiencing an upward trend that, for the moment, seems unstoppable, increases of more than 70% in 2021. But, what are the risks of cryptocurrencies? What control authority regulates them? Is it safe to invest in them? Can they be used as a payment method? Will paper money disappear in a short time?
These unknowns have arisen about the world economy for years, in the heart of technological advances and the disuse of physical money.
As technology continues to advance along with the use of cryptocurrencies, we are clear that many forms of payment are used every day (PayPal, virtual cards, contactless apps.) Alternatives to money in circulation
In this situation, the question arises:
Is it possible that some cryptocurrency guarantees the stability of the system?
It seems that, of course, cryptocurrencies, for the moment, have not only not solved this issue due to their excessive volatility, but also their anonymity makes them an excellent refuge for black money.
Since the traditional payment system is not anonymous, it guarantees compliance with regulatory requirements, such as customer registration, to prevent money laundering from drug trafficking, terrorism, and other illicit activities.
In contrast, in cryptocurrencies, such as bitcoin, money exchange occurs in a decentralized and anonymous way using exchanges.
There will always be concern about the fight against tax fraud; there are many countries where we can find tax havens; at this time, in the world, the great challenge is to put an end to black money laundering through cryptocurrencies.
The collapse of the economy due to the pandemic, the noise of the nationalization sabers, and low-interest rates have led global investors to diversify risks when investing their capital.
A new tax haven, this time based on the technological age?
Although it might seem impossible a few years ago, technology has taken giant steps, where we have been adapting and even getting involved with it little by little. For example, most banking operations are practically done online, which is no different with this Blockchain and cryptocurrency proposal.
Although tax evasion is an issue that dates back a long time, and that is why these tax havens are born, it is feared that due to the lack of regulation or control over cryptocurrencies by the leading financial actors such as central banks and governments.
This type of action could be increased, only leveraged the blockchain. There would be no trace of this type of operation.
Whether traditional (Central Banks/Governments) or digital (Blockchain/cryptocurrencies), no economic system has eliminated this type of tax evasion practice.
In this context, investors have long found in the different cryptocurrencies that exist in the market (bitcoin, litecoin, primecoin.) an opaque refuge value for their money, outside the supervision of the monetary and government authority.
The opacity and lack of regulation make cryptocurrencies a perfect tool to avoid paying taxes. As a result, we are facing a massive hole of tax evasion on an international scale that will make the existence of earthly tax havens meaningless.