Written by Diana Yaremenko
The market of cryptocurrencies is intensively developing. Several years ago few people knew about Bitcoin. Now people are observing the development of the crypto-market with great interest. Not surprisingly, the capitalization of only Bitcoin is $ 100 billion, which is almost 30% of Ireland’s GDP for 2016. This huge market can help the development of the economy of any country. But not many countries actively take part in the promotion of the Cryptocurrency. Ireland is one of the countries where the government is cautious about this trend. So in March 2018, the Irish Department of Finance published a document that analyses the impact of the blockchain technology and cryptocurrencies on users and companies. It describes in details how the chains work and how this can affect the country’s production, finances and economy.
As the statistics show, many residents have already learned about Bitcoin and other cryptocurrencies. According to research conducted by Amárach Research & Red Flag, 7% of respondents over 18 years old have already performed transactions using Bitcoin. When asked if they have ever heard about cryptocurrency, more than 85% of people answered in the affirmative and only 22% heard about the blockchain technology.
The new market gives new opportunities for business. Cryptocurrencies like other payment systems allow developing new directions and reaching new levels. For example, in 2014, the researchers developed the crypto-exchange platform bitcove.ie which received excellent support from the bank of Ireland. But after a few months their accounts were frozen. It is a shame to hear that the researchers who won the prize for the best financial start-up were made to seek support in other countries. Conservative financial system of Ireland at that time could not offer the team a solution that complied with the law entirely. After a couple of years, we see that there is progress, but the steps are faint. Some companies accept cryptocurrency and Bitcoins as payment. But in Ireland there are very few such projects.
Cryptocurrency and Ireland Legislation
In many countries of the European Union, legislative pressure concerning cryptocurrency is increasing. First of all, it is connected with safety. Cryptocurrency has an advantage and at the same time a disadvantage – the anonymity of transactions. On the one hand, this is the money transfer revolution. It allows making immediate transactions with no middlemen involved with a minimum commission to every place in the world.
But on theother hand, cryptocurrency is used for money laundering or financing of terrorist organizations. As for Ireland, now the Central Bank of the country does not regulate the cryptocurrency. But nevertheless this does not mean that you do not need to pay taxes. When making a profit in the cryptocurrency, you must pay income tax. The first 1270 euros have a zero rate, all that is higher than this amount is taxed 33%. However, the Revenue Commission for capital gains tax can’t control transactions and press charges against you. Therefore, most people carry out transactions not informing the revenue commission. Nevertheless, the governments of different European countries understand the future of the cryptocurrency. Some of them are developing technology that will control and monitor transactions in blockchain network, thus legalizing Bitcoin as a currency. The government of Russia and China is working on such a program.
Cryptocurrencies are developing dynamically due to speculative movement. Many people remember the end of 2017, when buying and selling Bitcoin could bring up to 1000% of income. These days have long since passed, but the desire to earn easy money remains. This is typical of many residents of megacities: New York, London, Berlin or Dublin. As a rule, when buying Bitcoin, people pursue one goal: to earn in the future. Sell in a week or a year no longer matters. It is important that the cryptocurrency has not yet been formed as a full-fledged monetary unit for daily settlements. It is risky to use it in business, as there is no stability in the future. Change in the daily rate can reach 5-10%. In such an uncertain state, the companies bear great risks. Thus, not many companies can afford to accept payments by cryptocurrency.
The market of cryptocurrency is just starting to gain popularity. Bitcoin is the undisputed leader among other currencies in terms of capitalization and volume of trading. Mechanisms for regulating transactions will be developed in the nearest future. This will allow countries to take Bitcoin out of the shadows and enable people to legalize money transfer with a minimum commission. As for the other cryptocurrencies, many of them will not be able to pass the test of time and will eventually disappear.