The cryptocurrency business is thriving, but a lot of things are happening, including, India’s 1% TDS on crypto transfers yielding $19 million in 9 months, Real-World asset tokenization surging, El Salvador removing all taxes related to tech innovation for economic growth and much more!
In this issue:
- Real-World asset tokenization could surge to $16T industry by 2030: research.
- Arbitrum Foundation scraps vote pledges redo after $ARB token-holders revolt.
- India’s 1% TDS on crypto transfers yields $19 million in 9 months.
- El Salvador removes all taxes related to tech innovation for economic growth.
- Amazon’s NFT marketplace launches digital collectibles from Beeple & Pudgy Penguins’ creators.
- Ethereum’s Shapella upgrade nears completion with the final Mainnet test.
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Real-World asset tokenization could surge to $16T industry by 2030: research.
Research by the Boston Consulting Group (BCG) suggests that the tokenization of global illiquid assets could become a $16 trillion industry by 2030. Real-world assets include equities, bonds, investment funds, and other financial instruments. They can also include commodities such as gold and silver and real estate. Furthermore, analysts predict this will become a catalyst for mainstream crypto adoption.
According to Citi Group’s latest global perspectives and solutions (GPS) report, RWA tokenization could become a “killer use case.” In its March report, Citi wrote that there would be up to $4 trillion in tokenized digital securities and up to $5 trillion of central bank digital currencies (CBDCs) circulating worldwide.
Managing editor of the Citi GPS, Kathleen Boyle, predicted that adoption would be driven by the CBDCs, tokenized assets in gaming, and blockchain-based payments on social media.
Crypto industry executives have echoed the sentiment. “So obvious that tokenized property and contracts will be the norm in the next 5-10 years,” said Circle CEO Jeremy Allaire on March 29. Additionally, Goldman Sachs launched a digital asset platform (GS DAP) earlier this year to tokenize traditional assets.
The Monetary Authority of Singapore is testing asset tokenization via Project Guardian, and Siemens has issued a 60 million Euro bond on Polygon.
RWA tokenization also offers more stable yields as opposed to highly volatile DeFi returns influenced by the crypto bull and bear cycles. Other benefits include more flexible investments as a token can be used to buy a fraction of a property for those that can’t afford the whole thing. It also makes traditional assets such as art, real estate, and private equity more liquid and easier to trade.
Arbitrum Foundation scraps vote pledges redo after $ARB token-holders revolt.
The Arbitrum Foundation said late Sunday it will break up a controversial governance package into a series of separate votes, bending to community pressure after holders of its ARB token staged a loud revolt.
“AIP-1 is too large and covers too many topics. We will follow the DAO’s advice and split the AIP into parts,” said the Community Lead with the handle Eli_Defi in Arbitrum’s Discord server.
The backtracking comes after a day of rage in the Arbitrum community over how the Foundation a centralized company charged with promoting Arbitrum’s claimed decentralized ecosystem held a “ratification” vote over decisions it had already implemented, including sending nearly $1 billion in tokens to itself.
With that vote barreling toward overwhelming failure on Snapshot, Arbutrim acknowledged it “will likely not pass” and pledged to hold redos over each section of its omnibus bill “early this week.”
The Arbitrum Foundation’s “special grants” program – at the heart of the controversy – will be rebranded the “Ecosystem Development Fund.” Arbitrum pledged to “provide context on how the funds will be used,” as well as a “transparency report” on the Foundation’s budget.
The Arbitrum Foundation further pledged it “has no near-term plans to sell more tokens,” a nod to the blowback over millions of dollars in ARB it sold for “operational purposes” without community consent.
India’s 1% TDS on crypto transfers yields $19 million in 9 months.
Indian tax authorities collected Rs 158 crore (approx. $19 million) in TDS on the transfer of virtual digital assets (VDA) till March 20, Minister of State for Finance Pankaj Chaudhary told the Parliament.
The Indian government brought crypto transactions under a new tax regime through the budget for 2022-23. It provided for 1% TDS on VDA transfers exceeding Rs 10,000 (approx. $125) in a financial year. Besides, all gains on VDA transfers were subjected to a 30% income tax.
The 1% TDS began to be deducted from July 1, 2023. In November, the minister informed the Indian Parliament that TDS collection on VDAs from July 1 to November 1 was Rs 60.46 crore ($7.4 million). Given the low tax collection, it was expected that the government would ease the tax rate and bring it between 0.05% and 0.1%, in line with the industry’s demand. But the authorities did not provide any such relief.
Subsequently, crypto transactions were placed under the Prevention of Money Laundering Act (PMLA). Industry representatives surprisingly hailed the decision as it provided some kind of clarity, a break from a complete regulatory vacuum.
Due to the high taxes, along with a hostile regulatory environment, India, which had a burgeoning crypto ecosystem, began to cede the advantage to the neighboring and more friendly jurisdictions such as UAE and Singapore.
As per a Nasscom study, 60% of India’s 450 Web 3 startups are registered outside the country. The report also highlighted that India is well set to drive the Web 3 transformation thanks to its large talent pool, which accounts for 11% of the global market.
El Salvador removes all taxes related to tech innovation for economic growth.
El Salvador, the first country to establish Bitcoin ($BTC) as a legal tender, made another historic decision to eliminate all taxes on technology innovations. The move runs parallel to the establishment of the National Bitcoin Office (ONBTC) of El Salvador, a.k.a. the Bitcoin office.
When legalizing Bitcoin on Sept. 7, 2021, El Salvador President Nayib Bukele saw the technology as a means to counter hyperinflation and dependence on the US dollar. Over the past 18 months, El Salvador restrategized Bitcoin investments and utilized capital gains in numerous instances to rebuild the nation.
Moving ahead into this strategy, Bukele believed in winding down tax requirements as a means to expedite technological development. As promised, on April 1, Bukele officially sent a bill to Congress effectively eliminating all income, property, and capital gains taxes on technology innovations “such as software programming, coding, apps, and AI development; as well as computing and communications hardware manufacturing.”
Supporting this initiative is the establishment of the Bitcoin office, a regulatory body for conducting joint initiatives with Bitcoin entrepreneurs and companies. According to Asociación Bitcoin de El Salvador (Bitcoin Association of El Salvador), ONBTC aims to “position the country in the world as a technological and economic power.”
In addition to attempting a financial comeback, Bukele’s ongoing efforts to reinvent El Salvador include promoting tourism, countering terrorism, and building business hubs in the region.
At the start of 2023, El Salvador passed legislation providing the legal framework for a Bitcoin-backed bond known as the Volcano Bond.
Amazon’s NFT marketplace launches digital collectibles from Beeple & Pudgy Penguins’ creators.
Amazon has revealed the release of digital compilations from well-known encrypted producers in the NFT market, including Beeple and Pudgy Penguins.
The platform will release digital compilations from well-known encrypted producers in the NFT market, such as Beeple and Pudgy Penguins. Amazon will operate the NFT platform on a private and permissioned blockchain that it controls, according to the conditions of a non-disclosure service agreement.
Another classified document verified that the NFT marketplace will use a private blockchain and that Amazon Web Services (AWS) will be the primary provider. According to numerous sources, the firm has entered into several secret agreements in preparation for the debut of the NFT marketplace. Amazon also disclosed to product partners that it will collaborate with Artifact Labs and Proof Collective, in addition to Beeple and Creator Creator.
The blockchain powering Amazon’s digital collectibles is gas-free and read-only, and it puts stringent limitations on NFT creators, partners, and ultimately the firm consumers after its debut.
Ethereum’s Shapella upgrade nears completion with the final Mainnet test.
The Ethereum network is on the cusp of a significant upgrade as the Shapella upgrade undergoes its final rounds of testing. According to reports, the Ethereum Developer Conference recently announced that the upgrade is entering its final stages, with a final test on the main network and cross-client testing of the latest releases.
The Shapella upgrade is set to introduce various new features to Ethereum, including implementing EIP-1559. This upgrade will help reduce transaction fees and introduce proof-of-stake, significantly improving the network’s scalability. In addition, the Shapella upgrade is expected to enhance the speed of the Ethereum network.
Based on a recent Ethereum Foundation blog, the client teams unanimously set a date for the upgrade to go live on April 12th after reaching a consensus during the 157th AllCoreDevs Execution Layer meeting. The announcements came following a smooth transition and successful testing on the Goerli test network.
Additionally, as the previous blog post mentioned, the Shapella upgrade is set to follow The Merge, allowing validators to withdraw their stake from the beacon chain and return it to the execution layer. Along with this, the upgrade introduces new features to both the execution and consensus layers of the Ethereum network, which will further enhance its functionality and performance.
To conclude, the Shapella upgrade is a significant achievement for both Ethereum and the broader blockchain industry, as it offers improved scalability, reduced transaction fees, and enhanced security to the network. As the testing phase approaches its final stages, the Ethereum community anticipates the upgrade’s implementation and the innovative changes it will bring to the platform.
Closing
That’s it for now! Thanks for reading today’s newsletter! Be sure to have a look at the Blog section to read our previous editions as well! Have a look at our Guides section if you’re interested in learning more about crypto! And finally, don’t forget to follow us on Twitter!
