Cryptocurrency On Its Way To Becoming A Legal Tender in New Zealand

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Cryptocurrency News Today – Cryptocurrency takes a closer step to becoming actual money as the island country of New Zealand agrees to collect tax on cryptocurrency if used to pay salary. This puts a bump to critics who said that cryptocurrency couldn’t be classified as real money because it couldn’t be used to pay taxes. Cryptocurrency news today learned that New Zealand’s Inland Revenue Department (IRD) had published two rulings regarding cryptocurrencies that were binding. The first ruling agreed that it was legal to pay the salaries of employees as long as some explicit conditions were met. One of the conditions was if it was duly stated that cryptocurrency would be used as a currency to pay salaries and such in the employment contract.

Cryptocurrency News Today – Cryptocurrency Will Become A Legal Tender In New Zealand – Cryptocurrency Latest Update

The Internal Revenue Department further explained that as long as an employee had agreed to receive part of their entire regular remuneration or benefits in cryptocurrencies, then the legal requirements had been met. The payment received would have to be consistent, a fixed amount and be in exchange for work rendered. The binding also stated that the type of cryptocurrency used as the medium of exchange must be easily transferable, durable and very hard to forge. This binding would come into effect from September 2019 after it passed the green light given by Susan Price, the Director of Public Rulings. The binding ruling would last for three years after coming into effect.

The second binding ruling had to do with bonuses and stated that any cryptocurrency given to an employee as an incentive with regards to their employment was to be viewed as a bonus only if the cryptocurrency given can be replaced for fiat or if the cryptocurrency is being used as a form of currency. The IRD agreed that bonuses fall under the category of salary or wages and was liable for domestic taxation.

Cryptocurrency News Today: Cryptocurrency Latest Update – Cryptocurrency Not Yet Fully Accepted In Some Countries

Though the cryptocurrency industry has come a long way in recent years, it is still seen as a fledgling concept and some countries are still grappling with the place of cryptocurrency and its implications. New Zealand’s binding ruling could be seen as a great leap in the view and acceptance of cryptocurrency as legal money but that’s just a spotlight on a vast area that mostly is unclear or shrouded in uncertainty. A majority of countries still do not know where the idea of cryptocurrency plays in their macroeconomics or fiscal policies and so some have banned the concept altogether. The cryptocurrency industry has faced criticism from the financial institution and governmental bodies.

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One such country that doesn’t seem to know where to place cryptocurrency in their economy is the United States. While the US hasn’t outrightly placed a ban on cryptocurrency, the idea of a digital asset hasn’t been legalized yet. This stand places some businesses and employers in a dire position as though there aren’t any data to support it, it only seems obvious that some employees have been paid with cryptocurrencies. While this class of people may be small, it does mean that they are unknowingly breaking the law. It also means that the government would be losing money from taxes that could be imposed on these businesses that dealt in cryptocurrencies.

Max writes about blockchain projects and regulation with a special focus on United States and China. He joined Smarterum after years of writing for various media outlets.

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