Bitcoin Bound By Taxes (But Not Death?)

Bitcoin Bound By Taxes (But Not Death?)

They say there are only two sure things in life: death and taxes. At least one of these is true for bitcoin: taxes.

As for death, of that we’re not so sure.

So, as transaction volume balloons, regulations in Europe come down, and prosecutions in the case of Ross Ulbricht do too.

BitPay, the bitcoin equivalent to PayPal, announced last week that it has processed over $100 million in BTC transactions over the course of 2013, increasing its merchant base to more than 15,500 approved merchants in more than 200 countries during the process. BitPay has also seen a surge in the number of merchants using its BTC payment pricing plan,

As ZeroHedge writes, the adoption curve of Bitcoin would put Obamacare to shame.

Since the change to BitPay’s new pricing plan, $30 a month basically, the surge in Bitpay adoption has been 50%, with a tripling in transaction volume.

The BitPay press release:

BitPay Inc, the world leader in business solutions for virtual currencies, announces it has processed over $100 million in transactions this year, and has increased its merchant base to over 15,500 approved merchants in 200 countries. Since the announcement of the new All Inclusive Pricing Plan in October, along with the integration with Shopify in November, the number of new merchants has increased over 50% and the transaction volume has tripled.

“This year, the 2013 holiday season was Adafruit’s biggest ever. We are delighted to offer bitcoin payments via BitPay to our community and customers. It was fast and easy, hundreds of orders and happy customers getting educational electronics, using bitcoin!” shared Limor Fried, Founder and Engineer with Adafruit.

Bitcoin has “clear potential for growth and could become a major means of payment for online transactions” a Bank of America analyst told CNBC. As the number of Bitcoin users continues to increase, merchants such as Adafruit, BTCTrip, Alliance Virtual Offices, and Clearly Canadian, see the value of working with BitPay to help expand their business.

Europe was the first entity to investigate Bitcoin, when the ECB warned about potential dangers of bitcoin. Now, European Union’s top banking regulator has begun preparing to actively supervise the virtual currency. Pens Bloomberg:

Trading Bitcoins could bleed you dry, the European Union’s top banking regulator said as it weighs whether to regulate virtual currencies. Thefts from digital wallets have exceeded $1 million in some cases and traders aren’t protected against losses if their virtual exchange collapses, the European Banking Authority said today in a report warning consumers about the risks of cybermoney.
China’s central bank recently barred financial institutions from handling bitcoin transactions last week and German police arrested two suspects in a fraud probe into illegally generating bitcoins worth 700,000 euros ($963,000).

“The technology is still relatively immature and lacks the infrastructure, regulation and understanding of the risks that are taken for granted in conventional financial systems,” Matt Rees, assistant director at Ernst & Young LLP, said in an e-mail. “It is not surprising then that thefts, frauds and other deceptions are currently commonplace.”

Interestingly, however, the online black market bazaar the Silk Road was somewhat known for its low rates of fraud.

So, Europe plans to tax bitcoin. Big surprise? No. According to the EBA, individuals using bitcoin may be subject to value-added or capital gains taxes.

Recently, also, the government of Norway, Scandinavia’s richest nation, said it would treat bitcoins like they were an asset, levying capital gains taxes on them.

“Bitcoins don’t fall under the usual definition of money or currency,” Hans Christian Holte, director general of taxation in Norway, said in an interview.

The European Commission must approve the EBA’s suggestion to regulate the virtual currency.

We “support the EBA warning to consumers on the risks associated with virtual currencies,” Michel Barnier, the EU’s financial services commissioner, said in an e-mail.

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