- TRON founder Justin Sun stated that China will see Bitcoin and the rest of the crypto market as a “legitimate form of wealth” in the future
- He believes that the newest regulations in China will persuade its government in realizing the value of crypto
- China has recently added a tax law on any form of crypto transactions
The People’s Republic of China recently passed a law putting a tax on every transaction. This would mean more financial stress for the citizens and business people involved with crypto. For TRON founder Justin Sun, this marks an opportunity for everyone in the country to realize that Bitcoin – as well as other legitimate cryptocurrencies – is a “legitimate form of wealth.”
The founder of the TRON project made a thread to back up his statement, which caused mixed reactions from the community.
“China has taken a big step towards cryptocurrency regulation by implementing a tax on crypto transactions. This signals the country’s increasing embrace of cryptocurrencies,” he tweeted.
Sun followed up on the statement by saying the tax law allows the Chinese government to see the actual value of crypto. The country’s realization could also influence neighboring countries and its strongest allies to see Bitcoin and altcoins similarly.
While crypto transactions have been banned in China since September 2021, the law did not stop the digital currency from circulating. The government recently declared a heavy tax law on all crypto orders as a countermeasure.
According to Sun, TRON, and crypto exchange, Huobi has been a key player in “driving the growth and development of blockchain technology in China.”
The law imposed a 20% personal income tax on crypto investors and the now-banned Bitcoin miners. Colin Wu, a Chinese reporter specializing in crypto news, Huobi leaked client information to tax authorities in China while some large clients were asked to gather taxes.
According to Wu’s report, the country took advantage of its declaration of crypto as an “illegal” payment to increase the tax percentage compared to fiat transactions.
He said, “Tax laws on cryptocurrencies have been improved worldwide. In China, there is some controversy over the advancement of taxation due to the wholesale definition of cryptocurrency business activities as illegal, as taxation of cryptocurrencies largely represents recognition of their legal status. This is in conflict with the position of financial authorities such as the central bank.”
Crypto Banned but Not Completely Out
China’s recent law needs to be clarified for many people. Since crypto payments were banned in 2021, people would assume that any further transactions would be considered a violation of the law. However, because of its high trading volume before the banning of Bitcoin mining that same year, the government needed help to keep up with the active crypto circulation.
Instead, China declared Bitcoin and all forms of decentralized digital currency as an “invalid civil act” – meaning it is terrible as a form of money but not “explicitly prohibited by law,” as Wu’s report said.
Contrastingly, blockchain projects continue to unfold in the country. The government recently released its central bank digital currency (CBDC) – e-CNY – to the public in select regions. Citizens can use the CBDC for transportation services and other utilities. Despite the fear of civilians regarding the centralized nature of e-CNY, China recently said that it would provide “privacy protection” rather than disruption.
