- Denmark has announced plans to implement taxation on crypto unrealized gains.
- The country’s law council plans to publish a report on cryptocurrency regulations soon.
The global crypto regulatory landscape has been fighting for the spotlight this week. Several countries have made announcements in the past few days, and certain controversies have arisen. Notably, US SEC chair Gary Gensler, in a recent interview, announced that the ‘regulation by enforcement’ will proceed undeterred.
In the last 24 hours, Denmark’s law council swept the sector by becoming the first nation to begin taxing unrealized crypto gains. The law council’s official statement released on Wednesday, propounds that they plan to charge a 42% tax on Danes with Bitcoin and other crypto holdings.
This move is an attempt to include crypto along with other financial investment assets and impose a clear tax on digital assets. Further, the report explained how it has been a challenge to regulate crypto that is not backed by real-world assets. The law council has been working on a report since 2021 owing to the extensive usage of crypto assets by the citizens of Denmark.
Secondly, the council believes that the new law will help bring uniformity in the taxation process and prevent Danes from being heavily taxed for their gains. Additionally, this taxation method for non-backed cryptocurrencies is similar to stock taxation.
How is Denmark Approaching Crypto Taxation?
The law council aims to bring symmetry to its Taxation system, for which it is streamlining different aspects of Finance, as per its discussion. Denmark’s Law Council believes that its tax recommendations go beyond stabilizing crypto taxes. They state that the asymmetry in gains and losses taxation disappears due to this recent regulation.
Zooming out, at the global level several countries have begun actively exploring regulations for cryptocurrencies. Recently, on Wednesday, the Indian government announced receiving expert opinions for a discussion paper that it plans to publish. Additionally, Norway’s central bank announced that it plans to conclude CBDC discussion by the end of 2025.
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