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Bitcoin is Coming to Ethereum Early Next Year
Announced yesterday, a joint effort between BitGo, Kyber Network, and Republic Protocol has produced Wrapped Bitcoin (WBTC) – a token that runs on the Ethereum network, but is tied to the value of Bitcoin.
This means that for the first time, users will be able to have both the stability and value of Bitcoin while also utilizing Ethereum’s platform to unlock new applications for the world’s oldest cryptocurrency.
However, to make all of this happen, there are moving parts behind the scenes to bring WBTC full circle.
Behind the scenes
At launch, BitGo will use its institutional-grade custodial service to store the Bitcoin reserves that WBTC is tied to.
To build trust with investors, a project dashboard will have a full overview that showcases WBTC numbers correlate to the Bitcoin reserve numbers.
Taking it one step further, even if investors had their suspicions, all transactions are verifiable by both blockchains – something that can’t be done with fiat-backed cryptocurrencies.
As for audits, a Decentralized Autonomous Organization (DAO) comprised of several reputable community members will verify that the balances of the custodian wallet and the WBTC smart contracts match. The DAO will also vote on project improvements, new DAO members, new custodians, and more.
Let’s go live
According to the announcement, WBTC is set to go live in January of 2019 after Kyber Network and Republic Protocol mint the new tokens from their own existing Bitcoin inventory.
With a community driven approach, WBTC will already have huge support from decentralized exchanges in the space at launch – a necessary move for the token’s successful adoption.
Excited for WBTC’s launch, CTO of BitGo Benedict Chan commented:
“We are really excited to tokenize the most widely accepted cryptocurrency on Ethereum. I think this is a great application of the flexibility and power of blockchains, and it’ll drive greater interoperability and utility throughout the entire ecosystem.”
India’s Supreme Court Orders Government to Make Decision on Crypto Within Two Weeks
What is going on in India
The issue of cryptocurrencies has been a polarizing topic between India’s government branches. The Reserve Bank of India has continually shunned the use of cryptocurrencies but has also said that it is not they do not have jurisdiction over crypto. The central bank still refuses to do business with crypto companies.
Because of the Reserve Bank of India’s handling of crypto, the Indian Supreme Court has received numerous petitions from exchanges and other industry groups challenging the bank’s decision not to support crypto.
Overall, there is great ambiguity about the legality of crypto in India. To create clarity, the Supreme Court is insisting that the central government establish an official stance.
Make a decision already
The Supreme Court has set a deadline of two weeks for the central bank to make a decision on how cryptocurrency will be regulated in the country.
Indian citizens involved in the cryptocurrency sector are furious with how their government has handled this situation. There are Indians whose jobs depend on the legality of cryptocurrencies and the companies wish to have freedom to operate.
It seems like within the next two weeks we will finally receive a concrete decision on crypto in India. No one can guess what the government’s decision will be. If they decide in favor of cryptocurrencies, it could be a catalyst for the space. India hosts a large population that is very intrigued by crypto.
IRS Advisory Committee Asks for More Guidance for Crypto Taxation
More clarity please
Last tax season was a nightmare for cryptocurrency investors. It was the first year that a sizable amount of people had profited from the asset class and a historic bull market just occurred. With all of the gains on paper, no one knew how to report these capital gains on their taxes. Most simply chose not to report their crypto gains on their taxes.
The Information Reporting Program Advisory Committee who advises the Internal Revenues Service (IRS) recently published a report detailing the IRS’s shortfalls. Not shockingly, cryptocurrency taxation was discussed in the report. The report talked about how that with the increase in popularity of cryptocurrencies “there has also been an equal rise in question as to the applicable tax consequences.”
The IRS has specifically addressed crypto taxation in the past. In 2014, the agency published a notice stating that crypto is treated as property for tax reasons. Before last tax season, the IRS reiterated this same notice.
Here are some tax tips
- Cryptocurrencies are taxed the same as personal property
- Buying a good or service with crypto is currently considered as a taxable event
- There is still limited clarity when it comes to digital currency taxation, so do your research and follow rules closely
For more information related to cryptocurrency taxation read our guest blog from Chandan Lodha, the co-founder of CoinTracker here.