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December 5th - According to European diplomats familiar with the matter, the United States has recently lobbied several EU member states to try to block the EUs plan to use frozen Russian central bank assets to guarantee large loans to Ukraine. These diplomats stated that US officials are urging member states to use these assets to facilitate a peace agreement between Kyiv and Moscow, rather than to prolong the conflict. According to some sources, the US 28-point peace plan, first proposed last month, has been revised, but the issue of asset disposal, Ukraines territorial status, and providing solid security guarantees to Kyiv remain major points of contention. European leaders insist that how these assets are used is an internal European matter, as the frozen funds are primarily held in Europe.Russian presidential aide Ushakov stated that US envoy Kushner is actively pushing for a solution to the Ukraine crisis.The onshore yuan closed at 7.0706 against the US dollar at 16:30 on December 5, down 16 points from the previous trading day.On December 5th, T. Rowe Prices Chief U.S. Economist, Brerina Urucci, noted in a report that the Federal Reserves monetary policy path in the second half of 2026 remains highly uncertain. "My biggest disagreement with the market lies in pricing in expectations of rate cuts in the first half of 2026; I think current market expectations are too dovish," she stated. This depends not only on the evolution of macroeconomic data but also on the response mechanism of the Feds new leadership. Urucci believes that if inflation resumes its acceleration this quarter and economic growth remains robust—as she anticipates—then the Fed will be unable to deliver on market expectations of further easing next year. She indicated that the Fed may pause its rate cuts after its December meeting.On December 5th, Jefferies analyst Mohit Kumar stated in a report that German government bond yields were little changed on the day but are likely to continue rising slightly. The bank expects German bonds to face some downward pressure in the coming weeks, pushing yields higher, although they may remain within a narrow range. He said that with the Bank of Japan preparing to raise interest rates, the pressure on Japanese government bonds is spreading to other markets, possibly as early as this month. He indicated that if the Federal Reserve cuts interest rates next week, German bond yields could also rise, but he remains cautious about future easing policies.

Crypto industry disappointed as Australia looks to enshrine tax rules

Cory Russell

Oct 27, 2022 16:16

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The cryptocurrency sector expressed its disappointment on Wednesday with Australia's decision to keep classifying cryptocurrencies as assets for tax reasons rather than foreign currency.


In its budget presentation on Tuesday, the government said that it will submit laws to formalize the classification of virtual currencies like Bitcoin as assets.


This implies that when investors sell cryptocurrency via exchanges or engage in digital asset trading, they must pay capital gains tax on their earnings.


The law eliminates confusion that followed El Salvador's decision to declare Bitcoin legal cash in September of last year, according to the Australian government's budget release.


However, Australia said that central bank digital currency (CBDC), or cash issued by the government, would be considered as foreign money.


Approximately 90% of the central banks throughout the globe are currently utilizing, testing, or researching CBDCs. The majority are attempting to avoid falling behind Bitcoin and other cryptocurrencies but are having trouble due to technical challenges.


The budget shift, according to Mitchell Travers, the founder of blockchain consulting firm Soulbis and a former operator of cryptocurrency exchanges, is ambiguous and seems to be at conflict with government research into the sustainability of a CBDC.


Given that the Treasury is also investing in attempting to shift the traditional technology systems that support our financial system over to digital assets, Travers said it would be unwise for the government to really take an enforcement approach to the taxation of crypto assets in its early stages.


If they were to impose the taxation of digital assets and then introduce its own CBDC without precise specifications of what token corresponds to what tax classification, it would be an amusing paradox.

The Treasury said in August that it will prioritize "token mapping" work, which would assist determine how crypto assets and associated services should be regulated. The Australian crypto industry is mainly uncontrolled.


The sharp decline in cryptocurrency values caused El Salvador, which became Bitcoin legal money last year, to suffer significant economic losses.


According to Caroline Bowler, CEO of BTC Markets, an Australian cryptocurrency exchange, "I think they are taking a snapshot in time and making an assessment for a long time around what happened in El Salvador and the price of bitcoin." She added that Australia will lag behind other nations that are adopting a more open-minded strategy.


The United Kingdom now has a prime minister who is conversant with central bank digital currencies, so Bowler predicted that Europe would gain ground. If we don't consider proportionate, sensible regulation, all these trade partners will surpass Australia.

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