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In case you missed it, Poloniex, one of the major altcoin exchanges, was acquired by Circle in February. Previously, Circle was focused primarily on the major coins versus fiat pairings, but since its acquisition of Poloniex it has had the opportunity to dive into more tokens, and in September it launched its own stablecoin to compete with tether (USDT) and the Gemini Dollar (GUSD), which was launched around the same time. The purpose of “stablecoins” is to help traders denominate their cryptos without creating a crypto-to-fiat event as well as to have coins that are pegged with some degree of certainty to the US dollar.

USD Coin has already been listed for use at Coinbase, one of the largest bitcoin exchanges in the world (owing to the fact that Coinbase is also a founding member of the token’s development consortium), and of course, they immediately put it to work on their new property, Poloniex. Now people wanting to get hold of and trade USD Coin on Poloniex have more incentive to do so, as Circle has decided to stimulate usage by eliminating trading fees for the coin on the Poloniex platform, at least through the end of November.

As CCN reported, Poloniex users are already trading two versions of bitcoin cash for USD Coin. Somewhat ironically, they are also offering to exchange USDC against USDT.

For the present, this means that Poloniex users have two stablecoin options. It is unclear whether Poloniex will list USDT indefinitely, but it has been on the exchange almost since its inception as Poloniex transformed from a major altcoin exchange to a major everything exchange.

At the time of writing, a minor arbitrage opportunity existed between USDC, wherein one could purchase a USDC for $1.00 and buy around $1.01 worth of USDT. Tether is supposed to be exchangeable directly for $1.00 via Bitfinex, so the divergent trading, done in mass quantities, is an opportunity for savvy traders with deep pockets to profit.

According to Circle, over $130 million in USDC are now in circulation, and this number should expand as usage of the token increases. Trading volume, though, has yet to match its market cap, as daily turnover is just $3.4 million.

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According to a French news website, France’s lower house of parliament (Assemblée Nationale) has backed a proposed plan from its finance commission which will effectively bring the taxes on bitcoin gains in line with other capital gains taxes in the country. At present, bitcoin sales are taxed about 20 percent more than traditional capital gains or sales of stocks and other securities.

The bill is spearheaded by Eric Woerth, the body’s finance committee chairman. It effectively brings the tax rate for bitcoin sales from more than 36 percent to the flat 30 percent that other capital gains sales pay. It was, however, not enough for some French citizens, one of whom said that the previous and proposed taxes both inhibit innovation.

Il aurait fallu et oser faire comme les autres pays européens, si vous voulez attirer les investisseurs. Au pire 11.5% était très bien.
Il ne faudra pas vous étonner de rater le virage de la blockchain comme ce fût le cas de l’internet. Trop de taxe tue l’économie du pays.

— Thysdrus (@Thysdrus1) November 7, 2018

Tax Also Applies to Bitcoin Purchases

According to French outlet Le Figaro, the tax would not only apply to strict sales of bitcoin such as using LocalBitcoins or Coinbase to realize profits but would also apply to using bitcoin to buy things, e.g., when “used as a means of payment for acquisition of goods or services.”

France is far from the only jurisdiction to tax bitcoin in this way, but the regressive method of taxation arguably stifles a technology that securely provides citizens of said jurisdictions a secure and powerful way to shop. More to the point, when a person uses bitcoin to purchase a product they are not getting real-world value in the same way as a regular market sale of coin — they cannot immediately turn around and re-invest if the market takes a dive, for example, as is the strategy of many bitcoin investors which generates a lot of taxes.

The tax reduction plan must pass the general legislative session and be included in the 2019 budget to become official, but it is in line with other moves on the part of France’s government to attempt to create a more friendly regulatory environment for cryptosecurities.

PACTE to Create Complete Regulatory Framework for ICOs and Cryptocurrencies

French Finance Minister Bruno Le Maire has been vocal on the subject of cryptos and his desire to make France the leading hub for ICOs in Europe. His support is one of many prongs in the financial wing of the French government’s effort to modernize and revitalize the French economy, in part with crypto investors.

In a recent interview, French treasury official Sebastien Raspiller said:

“Blockchain provides very promising avenues for innovation, including in the financial sector, and France was one of the first countries to adapt its legislative framework to explicitly allow the use of blockchain.

“In 2017, the challenges and opportunities raised by ICOs and crypto-assets became a more pressing issue. Given the potentially strategic nature of this question, the Minister decided to launch a mission on this topic, which was led by former deputy-Governor of the French central Bank, Jean-Pierre Landau.”

The government is currently finalizing a broad plan for economic development which is dubbed, in English, the Action Plan for Business Growth and Transformation, which includes a number of important changes for the crypto market. Specifically, it will include the creation of an “ICO visa,” which French authorities will determine eligibility for based on the submission of an ICO’s whitepaper. According to a previous CCN article on the subject:

“The visa excludes foreign corporations in an attempt to attract more projects to incorporate within the French nation. The new ICO visa will enable legitimate projects to more easily access services from banks and accounting firms, which to date has been difficult due to the regulatory uncertainty in the sector.”

Ultimately, many in the blockchain sector will agree that France is moving in the right direction. Friendly regulations are better than harsh ones, and occasionally a complete lack of regulation can open the door to limitless prosecution and tepidness on the part of would-be cryptonaughts who fear unknown consequences to trafficking in cryptos.

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This year has been filled with negatives for cryptocurrencies, or at least cryptocurrency investors. Trading at insane prices towards the tail end of 2017, crypto values have fallen closer to earth, with a large majority shedding as much as 80 percent of their value. This has led to quite a bit crisis talk, with some commentators prophesying an imminent crypto crash. Economist Tyler Cowen, though, isn’t sounding the alarm — yet.

In an op-ed published in Bloomberg, Cowen, a professor at George Mason University, wrote that a crypto price crash could be beneficial to the market, as it could set the market up for something big in the future. He made references to the 19th-century bubble which saw the collapse of railroad stocks and the dotcom crash of 2000. In all these events, Cowen argued, there were some negatives with plenty of positives.

“Internet stocks plunged in the dot-com crash of 2000-2002, but that in turn cleaned out the bad companies and paved the way for the subsequent tech revolution, including the rise of Amazon and Google,” Cowen explained.

As the world has come to realize, where cryptocurrencies are concerned, past events cannot determine future circumstances, but one idea Cowen holds dear is that a price collapse does not necessarily mean the “end of a technology or its relevance.”

For Cowen, cryptocurrencies saw a growth rate in value to almost $800 billion from zero, which made the market attractive to investors of all types. The ease of entry into the market also didn’t help matters, as an influx of “junky ideas were tossed around and then often funded by ICOs (initial coin offerings),” the economics professor noted.

While cryptocurrencies have a lot of use cases, including trans border payments and the creation of dApps, some neutrals still see it for its drawbacks — of which money laundering and drug trade stand at the top. Cowen, however, believes the slump in prices has led to more discussions on how to make cryptocurrencies more relevant while protecting investor funds.

Stating some of the solutions cryptocurrencies have created due to these meaningful discussions, Cowen explained:

“We’re at the point where crypto finally has to prove its social worth. But what might that mean? Imagine using crypto as a medium of micropayments to pay for media on the internet. Or perhaps you’ll use the blockchain to verify your identity, rather than telling some stranger on the phone the last four digits of your Social Security number.”

However, Cowen concluded his op-ed by stating that bitcoin may be facing its “do or die moment.” It’s time, he wrote, for bitcoin to “put up or shut up.”

“Think of bitcoin and other crypto-assets as like a company that is finally receiving a cash call. I am modestly optimistic, but it is time to put up or shut up. Let us hope that this ‘do or die’ moment will once again bring out the best in entrepreneurs,” he said.

Featured Image from OECD/Flickr

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