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An article posted by the Shanghai Municipal Tax Service explained taxes on digital currency transactions in China. It sparked speculations regarding a potential relief of the stringent China crypto ban regulations. The explainer was titled "Common Misunderstandings Regarding Personal Income Tax on Business Income and Categorised Income." According to a report by the South China Morning Post, the guide garnered immense attention after being published on WeChat on Sunday, January 7, 2024. The document referenced a 2008 statement by the State Taxation Administration (STA). Thereafter, some mainland crypto content creators suggested that taxing these transactions signals that Chinese authorities acknowledge the legitimacy of cryptocurrencies. The Shanghai tax service later deleted the disputable crypto tax guide from its public WeChat account. The attention grabbed by the Shanghai tax service's explainer reflects the hope within Chinese crypto circles for a review of the country's strict crypto ban. The situation is even more critical considering Beijing's push to encourage the digital yuan adoption. Also Read: Nvidia To Launch China-centric AI Chips Amid US Export Restrictions Furthermore, China's Ministry of Industry and Information Technology recently announced plans to draft a national Web3 development plan. However, it did not explicitly mention cryptocurrencies. On the other hand, legal experts on the mainland clarified that the Shanghai tax service's explainer doesn't indicate any potential change in the China crypto ban policy. Guo Zhihao, a Partner at Yingke in Beijing, busted the above-mentioned rumors in a WeChat post on Sunday. He noted that the questionable cryptocurrency tax guide is not an official policy document. Moreover, he added the STA statement which refers to talks about the virtual tokens used in video games. Hence, the article highlighted that individuals obtaining virtual currencies via online video game players and generating revenue by selling them must pay income tax. Additionally, it detailed taxation in four scenarios, including loans from investee companies and online monetary gifts. Unveiling the China crypto ban policy in 2017 was an extreme step on the country's part. Thereafter, it has intensified its crackdown on all cryptocurrency-related activities over the years, citing financial stability risks. This stance persists, even as it supports Hong Kong's aspirations to become a hub for virtual assets, including cryptocurrencies. Chinese authorities recently cracked down on the use of cryptocurrencies in illegal foreign exchange trading. On December 27, 2023, the Supreme People's Procuratorate and State Administration of Foreign Exchange asked forex regulators and prosecutors to keep a check on foreign exchange activities. The prime focus has been on cases where Tether (USDT) is used as an intermediary for trading yuan with other currencies.

Sentiment

Bearish/Bullish

13.01.24 07:54

by coingape.com

Vanguard May Reconsider Bitcoin Stance, Analyst Suggests

Bloomberg analyst predicts Vanguard may shift its anti-Bitcoin stance amid market changes and the need for diverse portfolios. Vanguard, a renowned investment firm, is speculated to shift its longstanding anti-Bitcoin stance, according to insights from Bloomberg's senior analyst Eric Balchunas. Despite Vanguard's current direction, Balchunas hints at possibly reevaluating this policy in the foreseeable future, aligning with the firm's expanding advisory services and the need for diverse investment portfolios. Vanguard's current approach towards Bitcoin and cryptocurrencies remains firmly resistant. The firm has recently made headlines by restricting customer access to the newly introduced spot Bitcoin Exchange-Traded Funds (ETFs). This decision aligns with their past actions, notably removing Bitcoin futures ETFs from their platform. According to a Vanguard spokesperson, this move aligns with the company's core values, focusing on products and services catering to long-term investors' needs. This stance, however, has not gone without consequence. Recent reports indicate that some Vanguard customers have started transferring their funds to other firms, seeking investment opportunities in the burgeoning cryptocurrency market. Despite these developments, Vanguard continues to uphold its cautious approach towards digital assets, reflecting the cautious perspective of its founder, Jack Bogle, who in 2017 labeled Bitcoin as a "plague." While Vanguard maintains its conservative stance, Eric Balchunas of Bloomberg foresees a gradual change in the company's philosophy. Balchunas notes that the growing emphasis on wealth growth and the necessity for diversified investments could nudge Vanguard towards reconsidering alternative asset classes like Bitcoin and other cryptocurrencies. This shift, he suggests, would be a strategic move to broaden their advisory business and cater to an evolving investment landscape. Balchunas's perspective is noteworthy, given the increasing institutional interest in cryptocurrencies. This trend is seen in contrast to Vanguard's current trajectory, but it highlights the dynamic nature of investment strategies in response to market demands and opportunities. Intriguingly, Vanguard's investment portfolio presents a contrasting picture. Despite its skepticism towards cryptocurrencies, the firm has significantly invested in MicroStrategy shares. MicroStrategy, known for its substantial Bitcoin holdings, is a key crypto player. As of September 2023, Vanguard holds over 1 million shares in MicroStrategy, valued at approximately $547 million, making it the second-largest institutional shareholder with an 8.24% ownership share. This investment is particularly notable given MicroStrategy's status as the leading public holder of Bitcoin, with an estimated 190,000 BTC valued near $6 billion. Vanguard's substantial stake in a company deeply entrenched in cryptocurrency raises questions about its investment strategy and potential openness to digital assets.