Bitcoin : How does the greed shield Bitcoin against excessive regulations.
Some governments, often despite their own old instincts, must support Bitcoin to maintain the long-term economic stability. Taxing Bitcoin, although being undesirable and highly difficult to implement, present, nonetheless, much better alternative to excessive regulations or to a complete ban. Here’s an example of Latvia.
During the past decade Latvian financial watch-dogs have showed themselves ostensibly wary of everything related to money transfers in and out of the country. Many local politicians have repeatedly accentuated the necessity to strengthen AML and KYC procedures in Latvian banks. Against that background the official position of Latvijas Banka towards Bitcoin looks surprisingly dovish.
It doesn’t mean, of course, that Latvian central bakers have ever revealed any warm feelings towards it. Nonetheless, in those few quasi-official statements, which reached public ears (including that of July 24, 2014), local financial authorities only bothered to mention that Bitcoin does not constitute the legal tender and it is not supported by the Latvian central government.
This incongruity might be explained by two facts. First, despite that Latvia, as its two neighbours – Estonia and Lithuania – has been traditionally open to technological innovations, the popularity of Bitcoin in there is on the below-than-average level (for an EU country). There are only 14 (from more than 9.5th) local Bitcoin nodes (45th place) and no Bitcoin ATMs in this country with about 2 million inhabitants. For comparison, Lithuania, with 2.8 million people living there, hosts 68 nodes and Estonia (1.3 million) – 10 nodes.
Secondly, looks like Latvian government’s financiers, even after all those loud political declarations, have more important matters to attend than to heroically defend their country against an illusory threat represented by Bitcoin. Such matters, for example, include replenishing country’s coffers emptied by the 2008 financial crisis and by the subsequent economic downturn.
To prove this point on April 16, 2018 the Latvian Finance Ministry declared that 20% tax might be imposed on profits derived from Bitcoin prices increase. Still, for all intend and purposes, faced by the absence of regulatory framework, the future of Bitcoin remains undecided in Latvia.
Business Notes for Latvian Startups Founders:
political climate: moderately friendly;
economic climate: moderately friendly;
regions to focus: Eastern Europe;
industries to focus: e-commerce, marketplaces, SaaS, FinTech;
major limitations: small economy (GDP is under $30 billion), small population (under 2 million), relatively high taxes (Individual income tax rate at 23%);
stimulus: GDP growth rate at 4%, fixed Internet penetration rate at 80%, educated work-force, mid-income population (per-capita at $14,000);
opportunities: to create an e-business aimed at young generation of users of mobile Internet in Eastern European countries.
Bitcoin (outlook): not regulated (moderately positive).
The author: Svyatoslav (Svet) Sedov
Angel investor and founder of The First International Incubator for Silicon Valley Companies (FirstInternational.In) in the Bay Area, CA, USA.
Bitcoin is a distributed, worldwide, decentralized digital money. Bitcoins are issued and managed without any central authority.
FindCrypto scans the web for the latest Bitcoin news, so you can find all the latest and breaking news in one convenient location.Author: svet_sedov
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