Bermuda allowed to pay taxes with cryptocurrency

Xcelpay|3 min read|Dec 5, 2019

Bermuda Becomes 1st National Government to Accept Tax Payments in USDC Stable coin.

Today, Bermuda has become the first government to accept payments for taxes, fees and other government services using USD Coin (USDC). Bermuda is allowed to pay taxes with cryptocurrency. This is the first time in history. Bermuda was the first in the world to pay taxes and state fees with stable coins USDC (USD Coin).

The UK overseas government said the decision is part of a broader initiative to use “decentralized financial protocols and services.”

This decision was made possible thanks to the introduced legal basis for cryptocurrency companies. Since 2017, a blockchain team has been working on the islands in cooperation with the Business Development Agency, which provides favorable conditions for the regulation of cryptocurrency. Circle, which launched USD Coin in 2018, has already opened a division of the Poloniex cryptocurrency exchange in Bermuda to serve foreign customers.

The core Forklog edition notes that Circle launched stable coin a year ago. To promote it, the company created a CENTER consortium. Security reserves have been independently audited several times.

Circle CEO Jeremy Allair considers Bermuda’s move to be natural, as the Bermuda dollar is pegged to the US dollar at a 1: 1 ratio, just like the USDC.

Forbes notes that last November the state of Ohio allowed paying taxes with cryptocurrency - local businesses now have the opportunity to make payments in bitcoins.

Many financial companies work with Bermuda, especially in the insurance sector. In addition, there are 4 large banks. Bermuda is reported to have the highest per capita GDP in the world, as favorable tax rates and lifestyle on the islands attract wealthy individuals and large corporations. Bermuda is known as the tax haven. There is no VAT, no tax on income, wealth or capital gains.

In Bermuda there is only a minimum wage tax, which is about 10% in the upper segment, as well as high taxes on the consumption of goods and services. There are also high duties levied on all imports. The capital of Bermuda tops the cost of living index. Google is one of the most famous companies that use the tax laws of Bermuda. In Bermuda, more than 15,000 companies are registered that have neither physical presence nor employees.

Bermuda taxes on bitcoins

Bermuda's light tax policy extends to Bitcoin and cryptocurrencies in general. Bitcoin is not recognized as legal tender in Bermuda, which explains its duty-free status.

Government Position on Bitcoin Business

The bottom line is that the country seeks to attract cryptocurrency, but introduces regulation to prevent crime.

Bermuda seeks to implement anti-money laundering (AML) standards and provide a reasonable, friendly foundation for cryptocurrency businesses and startups. The rules are not restrictive, but are designed to create a safe and predictable operating environment.

ICOs will be given special attention, as they require explicit approval from the Minister of Finance before they are allowed to work in Bermuda. Verification (KYC measures) will be mandatory for ICO.

How Bermuda's banking sector views Bitcoins

It can be expected that banks in Bermuda will adapt to the new rules of the government and will welcome a friendly attitude towards cryptocurrency.

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