Hungary cuts taxes on cryptocurrency income in half to boost its COVID-hit economy
Hungarian Finance Minister Mihály Varga on Tuesday announced that the country’s government will halve the capital gains tax on cryptocurrency income from 30.5% to 15% as part of its program to COVID-19 relief.
Announced in a video posted to Facebook, the news will make the EU country a competitive jurisdiction when it comes to capital gains tax on crypto assets and will likely appeal to Hungarian crypto investors who stand to benefit from it. a 50% tax reduction on this income from 2022..
Cryptocurrencies have come a long way since Satoshi Nakamoto, the pseudonymous inventor of Bitcoin, published a white paper on a Peer to Peer Cashless system in 2008.
Nakamoto sought to design an electronic payment system that would prevent trusted third parties like banks from verifying transactions.
Towards the end of 2017, the price of Bitcoin started to skyrocket and hit nearly $ 20,000 (€ 16,486) after climbing $ 900 in January of the same year.
However, the price fell again in 2018 amid fears of a regulatory crackdown on cryptocurrencies by Asian countries like China and South Korea.
In 2021, growing interest from financial institutions helped propel the total cryptocurrency market cap to over $ 2.5 trillion ($ 2.06 billion) this week, an increase of nearly 930% compared to last year.
Banks like Goldman Sachs and Morgan Stanley have already started trading cryptocurrencies while other financial giants like Citigroup have shown interest in entering the crypto market.
“There are different options from our point of view and we are thinking about where we can best serve clients,” Itay Tuchman, Citigroup’s global head of foreign exchange, told the Financial Times on Friday.
“We shouldn’t be doing anything that isn’t safe. We step in when we are confident that we can build something that benefits customers and that regulators can support, ”he told the newspaper.
In another vote of confidence in cryptocurrencies, the European Investment Bank announced last week that it would issue its first digital bond offered on a public blockchain using the Ethereum network.