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Regulation

‘Crypto Valley’ residents can now pay taxes in Bitcoin

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The Swiss canton of Zug is making it easier to imagine a world in which cryptocurrency users are resolutely in the mainstream.

The canton — which has earned itself the moniker of “Crypto Valley” for its positive stance towards cryptocurrencies — will begin allowing citizens to pay taxes in Bitcoin (BTC) and Ether (ETH).

According to Bloomberg on Sept. 3, “tax settlement by means of crypto currency will be available to both companies and private individuals up to an amount of 100,000 Swiss francs ($109,670).”

Roughly 127,000 people live in the region, which has previously taken steps to accept Bitcoin payments for select government services.

The new, significantly more wide-ranging move to accept taxes in crypto has been enabled by a partnership between the canton and crypto broker Bitcoin Suisse AG, which is based in Zug.

Bitcoin Suisse has previously partnered with Swiss authorities in Zermatt to enable taxpayers in that region to use Bitcoin as a means of payments.

Bitcoin Suisse founder Niklas Nikolajsen bullishly told reporters that “there’s almost nothing controversial about trading Bitcoin anymore. It’s completely mainstream.”

In his view, Bitcoin’s strong rally during the coronavirus pandemic is likely to strengthen the case for the currency’s resilience and longevity amid a rapidly changing economic landscape.

Despite this horizon, in the immediate aftermath of the COVID-19 crisis, local cryptocurrency firms have struggled. The Swiss federal government recently rejected a 100 million franc request by the canton of Zug intended to help keep local crypto businesses afloat.



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Regulation

New York authorizes first Yen stablecoin operator in the US

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New York has given the first authorization to a stablecoin backed by the Japanese Yen to operate in the U.S.

Per a Dec. 29 announcement, the New York Department of Financial Services has granted Japanese firm GMO-Z.com a charter to handle U.S.D. and Yen-backed stablecoins in New York. 

Given New York’s status as a global center, the NYDFS is the most prominent state financial regulator in the U.S. It is also one of the most aggressive. A pass to operate in New York often opens up the rest of the country. 

GMO’s charter is as a limited liability trust company rather than a full bank, the principle difference being in authorization to handle deposits. While a stablecoin operator typically needs the ability to hold reserves of the pegged asset, GMO’s charter limits its rights to hold other kinds of deposits not central to its ability “to issue, administer, and redeem” its stablecoins. 

The right to issue such non-depository charters has been a bone of contention between state regulators like the NYDFS and national banking regulators in the U.S. 

GMO president and CEO Ken Nakamura said: “We’re breaking ground with our move to issue the first regulated JPY-pegged stablecoin, which many see as a safe haven asset.” 

The NYDFS recently made changes to its famous BitLicense, including a conditional format that buddies up newly licensed firms with existing licensees. The first conditional BitLicense went to PayPal, facilitating the launch of its new crypto services earlier this fall with the help of longstanding licensee Paxos.