Since their emergence, blockchain technologies have shown potential for financial inclusion and the formalization of remittances. Recently, regulators and practitioners have studied the capabilities of blockchain technologies to streamline and, potentially, replace the infrastructure underpinning cross-border payments and remittances, i.e., correspondent banking. Correspondent Banking Relationships, also called âNostro-Vostro accounts,â are continuous bilateral arrangements that enable banks to provide services in countries where they do not directly operate. After the Global Financial Crisis, this infrastructure has undergone âde-risking,â i.e., a reduction of correspondent accounts and their concentration in fewer financial institutions, with especially detrimental effects on costs and speed of retail cross-border remittances. The existing literature has mostly focused on the point of sale of remittances, often overlooking correspondent banking. This paper, in contrast, connects remittances, blockchain technologies, and correspondent banking with the growing interest of critical social science in the significance of payment infrastructures for the constitution and configuration of money, finance, and markets. By unpacking the critical case of Ripple, this paper shows that blockchain applications to remittances focus on profits, risks, costs, interoperability, âtrapped liquidity,â and âidle capitalâ in correspondent banking accounts, rather than on financial inclusion per se. In so doing, this paper contributes to critical social studies literature on the formalization of remittances, understood as the transformation of remittances into a market frontier. Blockchain applications are shown to foster, rather than resist, remittances formalization, and they are presently being incorporated into existing infrastructures, business models, and regulatory structures. Rather than representing radically alternative monetary systems, blockchain technologies are the latest iteration of technologies heralding frictionless capitalism. Lastly, this paper shows the tensions and ambiguities inherent to interoperability and formalization. Blockchain technologies are dynamic in a way that problematizes dichotomies such formal-informal and mainstream-alternative. Hence, rather than providing a quantitative assessment of the impact of blockchain technologies, this paper investigates the ambiguities and tensions in the political economy and imaginaries inscribed in the materiality and design of blockchain-enabled payment systems.
George Calle, Alisa DiCaprio, Maarten Stassen, Alison Manzer
Abstract As trade policy disruption has become more commonplace, so have the calls for blockchain as a solution. But often the reasoning for this link has been unclear. Using the case study of Brexit as a baseline, the authors map four sources of trade-based uncertainty and explore the extent to which blockchain applications could â when implemented â attenuate supply chain disruption, which has lead to firms taking second best options like reducing investment and switching suppliers. Because the law has not kept pace with technology, the discussion also highlights prominent legal questions raised by blockchain in each instance.
In this article, the author outlines the existing interactions between cryptocurrencies, money laundering and organized VAT fraud, evaluating whether a growing use of virtual currencies may result in the development of more sophisticated fraud patterns. The adoption of blockchains, split-payment mechanisms and the definitive VAT regime are discussed as possible long-term measures to address the issue.
This Article argues that, contrary to the common belief that Bitcoin enables tax evasion, the Internal Revenue Service (âIRSâ) can increasingly police transactions in Bitcoin. First, commercial and technical intermediaries have emerged as part of Bitcoinâs ecosystem. This diverse set of intermediaries can facilitate tax enforcement, as the litigation over the IRSâs summons on Coinbaseâthe largest domestic digital asset exchangeâand subsequent IRS efforts show. These intermediaries could report transactions to the IRS or even, one day, withhold and remit tax payments. Second, the publicly visible, trustworthy nature of Bitcoinâs blockchainâits unique role as a shared truthâallows tax authorities to observe transaction flows. This renders Bitcoin unusually regulable for tax purposes, as recent efforts by the IRS to rely on Bitcoinâs blockchain to police tax evasion demonstrate. The Article offers a proposal by which the IRS might make better use of Bitcoinâs blockchain: the IRS can tailor an existing program to reward technically savvy whistleblowers who scour Bitcoinâs blockchain and determine identities that correspond to public Bitcoin addresses at issue.
Using Bitcoin trading data in Venezuelan bolivars from the LocalBitcoins peer-to-peer market place and using the theory of Purchasing Power Parity (PPP), Bitcoin, as a single universal asset, is substituted for the âbasket of goodsâ normally used in the PPP, allowing the estimation of the relationship between the Venezuelan bolivar and the United States dollar. In this analysis Bitcoin is used as a tool to enable the calculation of the bolivars to dollars unofficial exchange rate and consequently the implied inflation rate. Using Bitcoinâs publicly available prices in this way enables a governmentâs economic mismanagement to be identified more quickly than the typical approach of measuring changes in the Consumer Price Index. Venezuela is currently in crisis, which this approach identifies as a problem as far back as 2014, as official and unofficial exchange rates diverge and inflation rates increase yearly reaching an unbelievable 70,000% in 2018 alone.
Since their creation in 2009, crypto-assets have evolved from niche products into assets held and used much more widely. These assets pose challenges for policymakers and tax administrations, because, as pointed out by the OECD, they can be transferred and held without the participation of traditional financial intermediaries and without central administrators being aware of the transactions carried out or the location of crypto-assets holdings.
 On the indirect taxation side, the VAT Committee discussed the issues relating to the VAT treatment of crypto-assets and, in particular, of cryptocurrencies, on several occasions. The discussion on the most recent of the working papers on this subject, No. 1037 on the VAT treatment of crypto-assets, resulted in the adoption of the Guidelines which aim at harmonising tax administrationsâ practice regarding the VAT implications of the different transactions linked to crypto-assets.
 The article highlights the main challenges posed by cryptocurrencies in terms of VAT while focusing on the main supplies with the use of cryptocurrencies and their qualification for the VAT purposes. Those transactions range from the creation, verification, validation, and supply of cryptocurrencies through their modification, storage, transfer, to exchange. The article explains in this context the position of the VAT Committee reflected in the Guidelines.
Darcy W E Allen, Chris Berg, Sinclair Davidson, Mikayla Novak · 5 authors
Abstract From the adoption of the shipping container to coordinated trade liberalization, reductions in trade costs have propelled modern globalization. In this paper, we analyse the application of blockchain to reduce the trade costs of producing and coordinating trusted information along supply chains. Consumers, producers, and governments increasingly demand information about the quality, characteristics, and provenance of traded goods. Partially due to the risks of error and fraud, this information is costly to produce and to maintain between dispersed parties. Recent efforts have sought to overcome these costsâsuch as paperless trade agendasâthrough the application of new technologies. Our focus is on how blockchain technology can form a new decentralized economic infrastructure for supply chains by governing decentralized dynamic ledgers of information about goods as they move. We outline the potential economic consequences of blockchain supply chains before examining policy. Effective adoption faces a range of policy challenges including regulatory recognition and interoperability across jurisdictions. We propose a highâlevel policy forum in the AsiaâPacific region to coordinate issues such as open standards and regulatory compatibility.
There is an increasing acknowledgement among policymakers and private-sector partners that we cannot overcome the challenges of our time without harnessing the potential of emerging technologies. As blockchain technology is rapidly being introduced to support work across a wide number of areas of humanitarian action, this article considers its potential impact on women and girls. The article draws on experiences emerging from UN Womenâs explorations of blockchain technology and the first gender-responsive pilot targeting Syrian refugee women in UN Womenâs cash-for-work programme in Jordan. The article reminds us how important it is to introduce technologies in ways that maximise their potential to advance gender equality and the empowerment of women and girls in humanitarian settings, and minimise the risk of doing harm. Without conscious commitment to these aims, blockchain technology may exacerbate the marginalisation of women and girls.
Luis Ayala Cañón, Ana Herrero Alcalde, Jorge MartĂnez-VĂĄzquez
This paper analyzes the determinants of welfare benefit levels within a highly fiscally decentralized context. More specifically, we analyze the role of mimicking as a driver of the institutional design of subnational government policies in the absence of federal co-ordination and financing. Empirically we focus on the welfare benefit programs of Spanish regional governments during the period 1996-2015. Our results strongly support the significant role played by mimicking: regional public agents observe what their peers are doing and act accordingly, and this takes place even in a context of low mobility of households. Moreover, we find evidence of vertical externalities: even in a completely decentralized framework, regions consider the benefits set by the central government as a benchmark when determining their own welfare benefit levels
Blockchain is best known as the technology behind the popular cryptocurrency bitcoin, but the application of blockchain is much broader. In this article the author outlines opportunities and challenges for application of blockchain in VAT. She also analyses in detail what aspects of the VAT legislation and its implementation may be affected by blockchain in the future.
ABSTRACT The amendment of Government Regulation No. 24 of 2005 to Government Regulation No. 71 of 2010 based on accruals, made the government, especially the local government must apply and implement it no later than 5 years, namely in 2015. However, until now there are still many who do not fully understand the accounting-based accruals. There are various factors that influence government's preparedness and readiness in implementing accrual basis financial reporting. This study aims to analyze and examine the effects of environmental uncertainty, decentralization and assignment to accrual basis financial reporting. Population and sample in this research are Financial Administration Official of Regional Finance Organization (PPK-OPD) and Regional Finance Administration (PPKD) in Sidoarjo Regency. The study was conducted on 13 Local Government Organizations. The research method is quantitative and analytical technique using Multiple Linear Regression with SPSS data statistic application. The results of this study indicate that environmental uncertainty, decentralization and assignment have an effect on the accrual based financial reporting.Keywords : Environmental uncertainty, decentralization, task loading, Accrual based financial reportingCorrespondence to : momoepanda@gmail.com ABSTRAK Perubahan Peraturan Pemerintah Nomor 24 Tahun 2005 menjadi Peraturan Pemerintah Nomor 71 Tahun 2010 berbasis akrual, membuat pemerintahan khususnya pemerintah daerah wajib mengaplikasikan dan menerapkannya selambat-lambatnya 5 tahun, yaitu tahun 2015. Namun hingga saat ini masih banyak yang belum paham sepenuhnya dengan akuntansi berbasis akrual. Ada berbagai faktor yang mempengaruhi pemahaman dan kesiapan pemerintah dalam menerapakan pelaporan keuangan berbasis akrual. Penelitian ini bertujuan untuk mengetahui dan menguji pengaruh ketidakpastian lingkungan, desentralisasi dan pembeban tugas terhadap pelaporan keuangan berbasis akrual. Populasi dan sampel dalam penelitian ini adalah Pejabat Penatausahaan Keuangan Organisasi Pemerintahan Daerah (PPK-OPD) dan Pejabat Penatausahaan Keuangan Daerah (PPKD) di Kabupaten Sidoarjo. Penelitian dilakukan pada 13 Organisasi Pemerintahan Daerah. Metode penelitian yaitu kuantitatif dan teknik analisis menggunakan Regresi Linier Berganda dengan aplikasi statistik data SPSS. Hasil dari penelitian ini menunjukkan bahwa ketidakpastian lingkungan, desentralisasi dan pembebanan tugas berpengaruh terhadap pelaporan keuangan berbasis akrual.Kata kunci : Ketidakpastian lingkungan, desentralisasi, pemuatan tugas, pelaporan keuangan berbasis akrualKorespondensi : momoepanda@gmail.com
The tax treatment of cryptocurrency forks presents four unique challenges: parent/child designation, taxpayer access to the new token, assessment of fair market value, and assessment of comparable contemporaneous fair market values. We provide empirical evidence that each of these issues is a hurdle in determining whether income has been realized, or in apportioning the basis. We consider three existing approaches for assets acquired without a purchase. We conclude that the least problematic approach (adopted by Japan) is giving zero tax basis to the new coin and taxing the proceeds upon a sale, while treating the new coin as realized income (as recently ruled in the US) is the most problematic.
The aim of this paper is to highlight the main problems deriving from cryptocurrencies in the field of taxation.First, the paper will give a glimpse at the key features of cryptocurrencies and Blockchain.Secondly, the paper will deal with the definition of this phenomenon and it will focus on the difficulties faced by different Institutions and entities, at European and International level, to provide a convincing and homogeneous definition of cryptocurrencies.The paper will provide a comparative overview of some different definitions to give an idea of how difficult it is to identify what cryptocurrencies are.Finding out the correct definition is not important as such, but it represents the first step to understand how to tax revenue deriving from cryptocurrencies.In fact, various economically relevant activities are involved in the world of cryptocurrencies, such as mining or exchanging, and such activities need to be taxed.In this scenario, the current legislative framework is not up to date and obsolete and requires robust amendments.How should revenue deriving from cryptocurrencies be taxed?An answer has been given by the Italian Tax Administration, which has issued two responses, following the judgment of the ECJ which, however, do not seem to be conclusive.In fact, the Italian Tax Code does not set forth any provisions regarding cryptocurrencies and the Tax Administration had to interpret the existing provisions.In addition, the paper will explore the approach of a Notice issued by the US Internal Revenue Service (IRS Notice 2014-21, March 25, 2014) and the one adopted by the Virtual Currency Tax Reform Act, which is supposed to give a definitive solution to the problem of taxation in the US.In conclusion, the paper will pose some questions regarding the ability of the tax systems to deal with issues related to cryptocurrencies.
This paper examines the use of blockchain, or distributed ledger, technology for the potential supplantation of the antiquated process of international trade financing. Using the technology for this purpose has the potential to narrow the enormous gap in unmet demand for trade finance experienced by small-and medium-sized enterprises in the developing world. The current process of trade finance is still paper-based and relies heavily on manual labor. After the 2008 Global Financial Crisis, banks became restrictive in their lending, especially to small-and medium-sized enterprises in developing countries, leading to the aforementioned trade finance gap. Blockchain technology could narrow this gap by digitizing and automating key steps in the trade finance process, which will lead to efficiency gains along the trade finance process. By allowing users to establish a verifiable identity, blockchain also increases compliance with âknow your customerâ and anti-money laundering requirements. Currently, permissioned blockchains are better suited for trade finance as evidenced through recent initiatives, whereas permissionless blockchains have more to offer to individuals at the âbottom of the financial pyramidâ who are typically excluded from the formal financial sector. Financial inclusion refers to the delivery of basic financial services in a non-discriminatory way. Blockchain can help lift the large unbanked and financially underserved populations in the developing world out of poverty and into the global economy, contributing to sustainable economic growth.
Under conditions of decentralization, especially taking into account the creation and establishment of united territorial communities (UTC), there is a need to transfer financial resources to a different than earlier, primary, level of financing of socio-economic programs. Changing the direction of budgetary funds flows requires studying a number of aspects of the transformation of the budgetary and tax systems. In particular, there is a need to study tax and non-tax flows in the functioning of the united territorial communities. The article justifies the introduction of the concept of tax and non-tax (financial) flows, in particular, in the context of the united territorial communities. It is determined that the use of the category âflowsâ for tax and non-tax payments or budget revenues at various levels is a first step necessary for further research with the use of economic and mathematical methods. The concept âflowâ is more tight-laced in terms of both physical representations and mathematical methods of data processing. The paper suggests introducing the categories of âtax flowâ and ânon-tax flowâ into financial terminology. Tax and non-tax flows (revenues) of the local budgets of Ukraine and the budgets of the united territorial communities are analyzed. The analysis of these revenues in the local budgets of regions of Ukraine showed that all items of revenues increased during the study period, the largest increases being observed for the personal income tax, single tax, corporate income tax and basic subsidy. The data on the dynamic pattern of creating united territorial communities in Lviv region are given. An analysis of the structure of actual revenues and costs of general and special-purpose funds of UTCs of Lviv region is carried out, corresponding calculations are made.
In a recent article appearing in the Virginia Tax Review, I analyzed the income tax issues that arose from hard forks of cryptocurrencies That article focused on the August 1, 2017 hard fork of the Bitcoin blockchain that resulted in the creation of Bitcoin Cash, a new cryptocurrency. The hard fork resulted in a windfall to owners of Bitcoin, who came to own one unit of Bitcoin Cash for each unit of Bitcoin owned at the time. After considering the difficulties of taxing the new units as income immediately, I argued that the Internal Revenue Service (âIRSâ) should tax new units of Bitcoin Cash as âopen transactions,â deferring income tax consequences until the owner sells or exchanges the units. As that article went to press, the IRS released Revenue Ruling 2019-24 (the âRulingâ), which describes the taxation of cryptocurrency hard forks. The Ruling seems to embrace an âimmediate taxationâ approach that my article considered but rejected. This essay evaluates the Ruling in light of my recent article. This essay will review some of the arguments against immediate taxation and in favor of open transaction. Perhaps more importantly, this essay will identify inconsistencies and oddities that appear in the Ruling. In particular, the Ruling, by its terms, does not seem to apply to Bitcoin Cash. Even if the IRS wants to apply immediate taxation, it should nevertheless release new guidance that applies more clearly to Bitcoin Cash.