El Salvador prepares bitcoin bonds and Singapore taxes the NFT

The cryptocurrency market is back in terms of declines after last week's gains as the crisis in Ukraine continues to shake markets around the world. It looks like there will be several key flashpoints this week, including a vote on a mining ban in the EU and the issuance of Salvadoran bitcoin bonds.

Bitcoin started last week in the $ 38 range before surging to over $ 000 in the middle of the week when news broke of an executive order on cryptocurrencies issued by the White House of US President Joe Biden. The implementing ordinance set out key goals for US institutions to lay the foundations for better regulation, but had little real content beyond guidance on the digital US dollar that is under preparation. Bitcoin's price has dropped quickly and is now between $ 42 and $ 000. Ethereum has similarly surged to above $ 38 at the time of its announcement, but is again trading at $ 000 this morning.

Vote on the cryptocurrency mining crisis in the EU

The EU is due to vote today on laws that affect digital labor regulation resources and can have wide-ranging implications. Cryptocurrency Markets (MiCA) Vote is underway, with most observers saying the outcome is currently unpredictable. The legislation contains key provisions that would essentially prevent activities such as bitcoin mining in the EU. The draft act in its current form would require miners to submit compliance plans with the principles of environmental sustainable development. Failure to submit them would prevent them from functioning in the EU. The ramifications of this are huge - the EU is the main jurisdiction for cryptocurrency mining and the crypto market in general, with over 10 percent. global hashing of bitcoins from the region. While not the scale of the Bitcoin mining ban in China, the ramifications for the price of BTC and other cryptocurrencies that follow its price could be significant in the next few days. The crypto asset market is sensitive to these events, which could lead to another difficult trading period should the regulations pass.

El Salvador prepares bitcoin bonds

El Salvador is carrying out the final preparations for the issue of the so-called this week "Bitcoin Bonds". Last year, the Central American people embarrassed critics by making cryptocurrencies legal tender in the country, and the president Nayib Bukele announced via Twitter that the nation was buying tokens. The issuance of the first bitcoin-backed bonds is a key moment for the country's bold cryptocurrency funding policy. No other nation in the world has gone so far and has taken such a bold step in adopting technology. Demand for bonds is said to be low among institutional investors who are waiting for the outcome of the initial demand for instruments and heed the warnings of major players such as the IMF. But as with cryptocurrencies, the origins of something new often lie with grassroots investors. Absorption of cryptocurrencies through a tender has been restricted domestically, so there may be occasions when enthusiastic international observers respond to a purchase call. 

Singapore taxes the NFT

Singapore has announced its intention to start levying taxes on non-convertible tokens (NFT). The technology had an excellent time in 2021, but the market has struggled so far in 2022 and the wider cryptocurrency market has faced the challenges of rising interest rates and the crisis in Ukraine.

Singapore says it will levy taxes on those who earn income from NFT transactions and trade. Famous for its low taxes, Singapore does not have a capital gains tax on traditional assets such as real estate or stocks and shares, so NFT owners will not be responsible for this. However, they will be subject to a 22% income tax rate as the authorities intend to tax the NFT in the same way as other assets. The country has been cautiously neutral on technologies such as NFT and even more broadly crypto. For example, it needs to alert its citizens to digital investments while not being actively discouraged. The Monetary Authority of Singapore (MAS) recently announced that it will not regulate non-financial transactions as the underlying assets of the tokens are outside its scope.