Friday, January 27, 2023

France to Fight Tax Evasion With Strict Cryptocurrency Regulations

France to Fight Tax Evasion With Strict Cryptocurrency Regulations

French finance minister Bruno Le Maire wants a new legal framework that aims to regulate digital currencies to overcome tax evasion and terrorist funding, which he claims has become a common use for Bitcoin. In the past, referring to Bitcoin, Le Maire remarked “There is evidently a risk of speculation. I don’t like it. It can hide activities such as drug trafficking and terrorism.”

Also read: Malaysian Authorities Raid ‘Illegal’ Bitcoin Mining Operations

The finance minister has ordered France’s central bank chief to design the new regulations framework cautioning against “risks of speculation and possible financial manipulation” associated with cryptocurrencies. Le Marie’s edict reflects president Emmanuel Macron’s perspective on regulating digital currencies.

French president Emmanual Macron

Crypto Market — No Longer a Tax Haven

For years, cryptocurrency skeptics have criticized this new form of money for possibly allowing people to use it to eade taxes. And with the bitcoin price’s meteoric rise in 2017, the world’s governments have begun to take these claims seriously.

Now, in reaction to governmental fears regarding cryptocurrency-based tax evasion, Le Marie has decided to take action. However, in December of last year, Le Marie permitted unlisted securities to trade via the blockchain technology, madking France the first country in Europe to do so. This decision suggests that a total ban is unlikely.

France to Get Aggressive Against Cryptocurrencies

Although a ban seems unlikely, the finance minister said the Macron government will “not cede anything,” and urges people to not use cryptocurrency to avoid taxation. Marie also desires to strengthen Europe and act more assertively in order to keep up with economic powers like the U.S. and China.

In the past, the French Finance Minister said he plans to debate cryptocurrency and propose joint regulations in the forthcoming G20 summit.

“I am going to propose to the next G20 president, Argentina, that at the G20 summit in April we have a discussion altogether on the question of bitcoin,” said Le Marie.

European governments also plan to crack down on all criminal activities that umbrella their funds via cryptocurrencies. Bitcoin and sibling cryptocurrencies have recently come under the spotlight for it increasing use in drug trafficking and terrorism and money laundering.

At an event, Joachim Wuermeling, a board member at Bundesbank said,: “Effective regulation of virtual currencies would therefore only be achievable through the greatest possible international cooperation because the regulatory power of nation-states is obviously limited.”

Will France put up a harder stance against the cryptocurrency investors? Share your thoughts in the comments section.

Images via Blog de Arnoud Mouillard, Charles Platiau // Reuters

Bitsonline Email Newsletter