Competitive advantage in the world market
The tax rate proposed by Eric Trump of 0% would apply not only to the emerging startups of cryptography, but also to the American companies established by focusing on blockchain technology, cryptographic exploitation, decentralized finance (DEFI ) and other related services. By offering such an incentive, the United States could attract more cryptographic companies and further consolidate its position as leader in the development of digital assets.
Other nations, such as Switzerland, Singapore and Salvador, have already implemented similar policies adapted to tax to draw cryptocurrency companies, creating an environment where these projects can flourish.
Cryptographic tracker
Impact on non -based projects
Projects based in the United States such as Bitcoin, Algorand, Circle (USDC), Coinbase, Gemini, Blockfi, Chainlink, Cardano, Hedera Hashgraph and Ripple are to benefit considerably from this tax relief. However, concerns emerge as to the impact on cryptography projects not based on the United States. The reports indicate that foreign cryptographic companies wishing to operate or invest in the American market could cope with a strong capital gains of 30%. This tax gap could create an unequal playing field, which disadvates international projects compared to their American counterparts.
Challenges and criticisms of the proposal
Despite the potential advantages, the proposal is not without challenges and criticisms. A main concern is the potential loss of tax revenue for the US government if capital gains taxes are eliminated for the cryptography sector, which has become a very lucrative industry. Critics argue that this could lead to a significant budget deficit, which raises the way the government would compensate for lost income. projects. Such a tax incentive could create an environment where only dominant American companies thrive, potentially stifling international innovation and creating a destatated crypto ecosystem. The crypto is completely unlikely due to tax revenue problems and the priority to renew the tax cuts in the Trump era. A more achievable objective is to obtain an exemption of $ 200 minimis for small bitcoin and digital asset transactions, similar to exemptions from foreign currencies. This would simplify reports for daily transactions such as grocery store. There is bipartite support and the proposal should be adjusted to inflation to remain relevant, balance innovation and equity.
Political reality: the abolition of capital gains on cryptography would require an act of congress and is very unlikely in the short term.
The main obstacle is the significant loss of tax revenue, which makes such a proposal difficult to include in the next tax bill.
RIGHT…
– Dennis Porter (@dennis_Porte_) January 26, 2025
Trump’s proposal to ban CBDC
In addition to tax relief, President Donald Trump has signed an executive decree that has created a working group responsible for offering new regulations for the cryptocurrency sector and exploring the potential of a stock of crypto- national currency.
The executive decree also aims to protect banking services for cryptographic companies, responding to concerns that regulators have put pressure on banks to break links with industry. In particular, the order prohibits the creation of digital currencies from the central bank (CBDC) in the United States, which could compete with existing cryptocurrencies like Bitcoin.
Comparison of the position of cryptography of the United States and India
Unlike the Pro-Crypto position of the United States, India has adopted a more restrictive approach to cryptocurrency regulations. In 2021, the Indian government proposed a bill which could potentially prohibit cryptocurrencies and introduce a digital currency from the Central Bank (CBDC), which raises concerns within the cryptographic community. Although the proposed ban has not been implemented, the Central Bank of India, the Reserve Bank of India (RBI), imposed strict banking restrictions on the exchanges of crypto, which limits access Investors to cryptography services.
In addition, India’s tax regime on cryptocurrencies is relatively severe. In 2022, the Indian government introduced a 30% tax on the benefits of cryptocurrency transactions, in parallel with a 1% tax on the source (TDS) on all transactions higher than a specific threshold.
These high taxes have caused investor apprehension, much fearing that the Indian cryptography market would be stifled, pushing innovation and investment to more user-friendly cryptographic jurisdictions like the United States and Singapore.
Unlike the American proposal, the India’s approach could be considered discouraging for investors and developers. The absence of clear regulations, associated with high tax charges, makes India a less attractive destination for cryptocurrency projects compared to nations such as the United States, which offer more favorable tax rates and lighter regulatory executives.
