Should Bitcoin be accepted as salaries? Know these factors first

Trading in Bitcoin began in 2009 without any source of its management or owner. No one up to this date is aware of who invented this digital coin, however, many speculations and names have popped up. ‘Satoshi Nakamoto’ is presumed to be the pseudonymous person or persons claiming to be based in Japan, as the inventor of bitcoin. However, these are still not confirmed as of date. But that hasn’t stopped Bitcoin’s frenzy stun the world of the markets.

Bitcoin gained popularity in early 2017, and it became the first-ever cryptocurrency to come into actual use. Bitcoin is decentralized and easily available. However, the idea of adopting bitcoin as a means to buy goods and services is still not widely accepted but there are many companies, retailers, and platforms that kept a broader mindset toward using Bitcoin as a medium of exchanging services and payments.

As per CoinMarketCap data, the Bitcoin price today is $46,644.46 USD with a 24-hour trading volume of $32,264,225,286. In the last 24 hours, Bitcoin has jumped by 1.49%. Bitcoin has a supply limit of 21 million BTC coins, while currently, the circulating supply is more than 19 million BTC coins.

Bitcoin stays the largest cryptocurrency in the market even when it corrected from its all-time high of $$64,863.10 on April 14, 2021. The digital coin has surpassed the market cap of $1 trillion in April last year. However, experts are optimistic about Bitcoin going forward.

But should Bitcoin be used as a means to receive a salary?

Notably, Bitcoins have been created for a process known as mining. They are allowed to be exchanged for other currencies, products, and services, however, the digital coin is criticized for its illegal transactions as well. Not just that, Bitcoin has also been criticized for the large amount of electricity used for mining, price volatility, and thefts on exchanges. 

Many renowned experts have referred to Bitcoin as a speculative bubble that will burst eventually. It simply means, that Bitcoin’s price has a high volatile frequency, and just like a soap bubble it can burst drastically. However, some experts have seen Bitcoin as the game-changer for the cryptocurrency market and the beginning of a new era in the trading world with a footprint of the blockchain industry expanding.

Some local and national governments have officially started using Bitcoin in some capacity, especially a country called El Salvador which has adopted BTC as a legal tender.

After the wild ride in 2017, Bitcoin’s performance motivated many to opt for the coin as payments for goods and services but that idea was soon shunned as regulators across the globe decided to tighten the bolt around cryptocurrency trading.

Last month, the Indian government released stringent tax rules on crypto trading. Lok Sabha approved taxation rules on virtual digital assets (VDAs) or “crypto tax” that was proposed in Budget 2022-23 by clearing the Finance Bill 2022. These new tax rules have become effective from April 01, 2022.

Under the new tax rules, in India, a 30% capital gains tax is imposed on crypto transactions. Further, a loss incurred during the transfer of the virtual asset will no longer be allowed to set off against any income calculated under the “other” provision of the IT Act as the word “other” has been removed. Also, 1% tax deducted at source (TDS) on Indians buying or selling cryptos along with taxes on crypto gifts has been imposed.

On India’s tax rules, Probir Roy Chowdhury, Partner, J. Sagar Associates (JSA) said, “While many in the cryptocurrency industry initially welcomed the inclusion of ‘virtual digital assets’ in the Finance Bill, 2022 (“Finance Bill”) – heralded as the government’s implicit acceptance of cryptocurrency, a deeper look at the Finance Bill demonstrates the government’s reluctance to encourage growth in this space.”

Also, not to forget, no major economy has accepted Bitcoin as a legal tender. Many countries including India are exploring their own mechanisms to launch central bank-backed digital coins (CBDC). RBI will introduce India’s digital currency in the financial year FY23.

Further, even though many services are using Bitcoin as an exchange. But, broadly, it is not used. There are many services like groceries, or other goods purchases at local shops where Bitcoin is still a stranger. Bitcoin isn’t widely used among the locals, and chances are you will have to still rely on your country’s currency for such services.

However, many companies especially e-commerce platforms globally have started to warm up to using Bitcoin as a payment method. However, a…

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