Blockchain Papers

Edgar Jurado

No abstract is available for this record.

Georg; id_orcid 0000-0002-0882-8270 Kofler, Dietmar Aigner, Peter Bräumann, Michael Tumpel

No abstract is available for this record.

Alessandro Liotta

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.

Bryce Ciccaglione

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 ‘know your customer’ 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 “bottom of the financial pyramid” 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.

Ihor Alieksieiev, Stepan Paranchuk, Oksana Chervinska

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 “flows” 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 “flow” is more tight-laced in terms of both physical representations and mathematical methods of data processing. The paper suggests introducing the categories of “tax flow” and “non-tax flow” 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.

Valentina Derbeneva

An urgent task today is to strengthen the importance of property taxation, measured not only by quantitative indicators, but also by the correct perception of tax by local authorities. The scope of the research is the development of the process of fiscal decentralization in Russia. The subject of the study is the relationship of the principle of benefits in property taxation with the process of fiscal decentralization at a local and regional level. The employed research methods include logical analysis, the descriptive method and systematic presentation of the results of statistical analysis. The aim of the article is to study the importance of property taxes for the implementation of fiscal decentralization in Russia. As a result of the calculations, it was concluded that there is a tendency toward an increased financial dependence of local governments and increased centralization at the local level. It is shown that increasing transfer dependence and increasing centralization at the level of administrative centers of the regions while reducing gratuitous assistance at the regional level indicates a concentration of resources around the regional capitals and a decrease in financial support for smaller areas. The author proposes that the benefit principle in the property taxation system in Russia should be introduced and proves the possibility of doing that. The principle implies the transfer of property taxes to the targeted category, when tax revenues are directed toward specific items of municipal expenditures. The ultimate goal of introducing the principle of benefit is to increase the responsibility of local authorities regarding the efficient provision of municipal public goods, highlight the importance of property taxes and strengthen fiscal decentralization at the local level. To determine the potential ability of property taxes to fulfill the target function, a ratio of municipalities’ fiscal self-sufficiency was proposed and calculated, which allows one to determine the share of net expenditures of budgets subject to financing with property tax. The input data for the study was borrowed from statistical data on the execution of regional and local budgets, as well as tax revenue reports of tax authorities.

Margaret Ryznar

This piece summarizes the implications of applying Coffee bonding theory to bitcoin, using tax as a case study.

Eric D. Chason

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 (“IRS”) should tax new units of Bitcoin Cash as “open transactions,” 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 “Ruling”), which describes the taxation of cryptocurrency hard forks. The Ruling seems to embrace an “immediate taxation” 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.

Michel Avital, Johannes Rude Jensen, Omri Ross

We explore the governance mechanisms of decentralized organization drawing on an empirical study of the open source blockchain project Ethereum. We identify three classes of governance mechanisms: control, coordination, and realignment, and compare governance praxis in centralized and decentralized organizations. The findings point to governing action through mutually affective processes between stakeholders and the organization as an emergent whole, in which we map articulations of governance to the process-ontological concepts code and territory. This informs a philosophical interpretation in which governing action is understood as both coding/decoding of norms and practices, and territorializing/deterritorializing of organizational boundaries through perceived shared notions of identity. We argue that interpretations of governance mechanisms in near-autonomous or stigmergic forms of a decentralized organization require a theoretical taxonomy emphasizing process over structure.

Harry Kitchen, Melville McMillan, Anwar Shah

No abstract is available for this record.

Autilia Arfwidsson, Louise Fjord Kjærsgaard

The authors analyse the current classification of cryptocurrencies from the Danish and Swedish domestic income tax perspectives. Cryptocurrencies are analysed as they are typically applied in practice, where a categorization is made between coins, utility tokens, security tokens and asset tokens. In particular, it is concluded that despite the economic differences of different cryptocurrencies, they generally fall outside the scope of Danish and Swedish lex specialis regulation on taxation of capital gains and losses from the sale of certain assets, for example, shares and claims in currency. In both countries, there appears to be a presumption that most cryptocurrencies should be taxed as assets held for investment and speculative purposes. It is argued that such an approach is problematic not only in relation to the principle of neutrality, but also because it creates a barrier to realizing the economic potential of cryptocurrencies. The authors conclude that (1) the classification of cryptocurrencies poses challenges and uncertainty for tax purposes due to the lack of a regulatory framework, the absence of common definitions and the diverse technical structure of tokens and coins and (2) the classification for Danish and Swedish tax law purposes should be based on a case-by-case assessment of the specific cryptocurrency.

Stephanie Armbruster, Beat Hintermann

We analyze the strategic interaction of regional and federal governments using a model that includes fiscal externalities in the form of inter-regional capital tax competition and technical externalities in the form of inter-regional spillovers. The federal government aims to correct for these inefficiencies using a transfer system. If the regional governments are policy leaders (such that federal policy is set conditional on regional choices), they will internalize both fiscal and technical externalities but free-ride on the transfer system. Efficiency can be achieved by introducing a second transfer scheme that is independent of regional public production. If the federal government sets its policy first and can commit itself to it, the outcome is efficient only if matching grants are used that are financed outside of the transfer system.

Olivier Accominotti, Stefano Ugolini

No abstract is available for this record.

Natalia Ivanova, Galina Morunova, Vitaliy Fedosov, Svetlana Kuzmina

In this article, the authors consider issues of fiscal decentralization in the context of sustainable development of territories, justify the development trends of the world community in providing public goods for the population. The analysis of this issues is carried out in comparison of indicators for Russia and the countries of the Organization for Economic Cooperation and Development (OECD). This allows assessing the current level of fiscal decentralization in the world community, in Russia, and also determining its prospects. The authors presented the results of the study, which contain the dynamics of subnational budgets of Russia and OECD countries, separately identified local budgets, the dynamics of financing of proactive budgeting, the typology of the main projects of proactive budgeting, examples of municipal-private partnership projects implemented in Russia. In addition, the article sets out new approaches to the financial support of local government activities in the country, based on the introduction of self-taxation, bond loans and other forms of financing at the municipal level.

Daniel Hellwig, Goran Karlic, Arnd Huchzermeier

Decentralized finance has evolved as a major contender for traditional banking systems over the last few years. Evolution in blockchain and cryptography technologies are the driving forces for decentralized finance’s growth. The emergence of Bitcoin in the finance system was a major driving force toward the tremendous growth of decentralized finance. However, with various platforms merging every day, the decentralized finance sector is still in its early, unorganized stages. The current decentralized finance market is chaotic. With a new “coin” being introduced almost every month, standardization is highly lacking in the system. DeFi already has several different applications available. For instance, one can purchase stable coins, or assets pegged to a national currency, on decentralized exchanges, move the assets to a lending platform that is also decentralized to earn interest, and then add the interest-earning instruments to a decentralized liquidity pool or an on-chain investment fund. DeFi enterprises frequently aim at decentralized decision-making, or governance, in everything from the user fees to the products they provide. A decentralized program may be started by one person or a small number of individuals, but as the project gathers traction, its leaders frequently try to step down and cede control to the user base. A decentralized autonomous organization that has its rules and regulations written into computer code and that may issue governance tokens, which allow its holders a voice in decisions rather than allowing the decision-making to a centralized government authority as in case of traditional finance, could represent this transition. While on one side, world governments are still trying to grasp and regulate the sector, on the other side, the technology’s reach has been very limited. Undoubtedly, the emergence of blockchain-based decentralized finance is massively influencing our current finance technology industry. In this chapter, we discuss the current growth in the FinTech industry and the blockchain-based decentralized finance sector. Furthermore, we discuss how decentralized finance can be used in the current FinTech industry.

문병효

No abstract is available for this record.

Kojo Oduro

Bahl and Bird’s book aims ambitiously to be a panacea for all that is unwell in fiscal decentralisation. It maps the appropriate fiscal structures and relationships between central and local govern...

F. Rubinstein, Gustavo Gonçalves Vettori

No abstract is available for this record.

Adam Chodorow

The IRS recently dealt a blow to Bitcoin enthusiasts by ruling that Bitcoin and other similar currencies should be treated as property–and not foreign currency–for income tax purposes. As a result, those who use bitcoins to purchase goods or services must report gain or loss on each transactionn if the bitcoins have changed value between the time they were acquired and spent. Treating Bitcoin as a foreign currency would have permitted individuals to take advantage of the $200 personal-use exemption and required taxpayers to adopt a formulaic system for tracking the basis of commingled bitcoins.The IRS's decision seems correct as a matter of positive law, but laws can always be changed. In this Article I consid4r whether Bitcoin should be treated as a foreign currency for income tax purposes. I conclude that tax authorities should adopt a foreign currency definition that excludes bitcoin and similar currencies because (1) a broad definition ciould create significant administrative and line-drawing problems, and (2) the government has little interest in promoting alternate currencies . Nor should authorities extend the personal-use exemption to virtual currencies. In contrast, authorities should extend the basis rules applicable to foreign currency to virtual currencies to prevent taxpayers from using the basis rules to improperly reduce their tax obligations.

Yongyou Li

Although China¡¯s asymmetric fiscal decentralization system has been criticized for many years, there have been few studies giving direct evidence of its negative incentives on local government spending policies. By introducing the mechanism of asymmetric decentralization and fiscal transfers to the objective function of local government, this paper studies the incentive effects of asymmetric decentralization and fiscal transfers on spending policies of local governments, and uses the provincial panel data to carry out an empirical test. The conclusion shows that the asymmetric decentralization significantly weakens the incentives of local government to increase social expenditure, and as a solution to asymmetric decentralization, fiscal transfers fail to play a good role. Due to the relatively large income effect, the financing mechanism of fiscal transfers not only significantly reduces the incentives of local government to provide social public goods, but also weakens the constraint effect of fiscal competition on expenditure policies of local governments because of the increase in the relative cost. Although the distribution mechanism of fiscal transfers has a significant positive incentive to local government in regions where the net inflow of fiscal resources is more than zero, because of common pooling effects, the comprehensive effects of fiscal transfers in the distribution of incentives of local governments to provide social public goods are negative in all regions.

Valerie Laturnus, Alfred Lehar

No abstract is available for this record.

Christian Beckmann

No abstract is available for this record.

Zbigniew Dumieński, Nicholas Ross Smith

The incredible growth of cryptocurrencies over the past six months has captured the attention and imagination of the world, with something of a crypto-mania emerging.What was once predominately the domain of a niche group of internet libertarians, cryptocurrencies are quickly becoming the darlings of Wall Street.

Nathan de Zilva

No abstract is available for this record.