In today’s edition of Bitmama’s weekly crypto news roundup, we cover interesting developments in the cryptocurrency industry. Top picks – Ethereum founder is backing Zambia’s bid to be Africa’s tech hub, Russia recognizes need for local crypto assets market, Indonesia to impose 0.1% crypto tax starting in May.
Let’s get started.
Ethereum founder is backing Zambia’s bid to be Africa’s tech hub
Zambia may be better known for mining copper than crypto, but a group of young entrepreneurs are looking to reinvent the country as an African technology hub with support from Ethereum co-creator Vitalik Buterin.
Startup founders from southern African countries and abroad are talking to the government about creating a regulatory and business environment that would attract more tech firms and capital. The group is in the process of organizing a conference in Lusaka, the capital, in May to draft detailed policy proposals that they believe will see Zambia succeed where previous African tech hubs have stuttered.
“Ultimately it comes down to being welcoming,” said Mwiya Musokotwane, an early champion of the project and the son of Finance Minister Situmbeko Musokotwane. “If the policy doesn’t really live up to people’s expectations, no one’s going to be there.”
Buterin, who helped create Ethereum – the world’s second largest cryptocurrency in 2013, expressed his support in a virtual meeting with Zambian President Hakainde Hichilema earlier this year. That followed a 2019 visit to the country as a guest of Mwiya, who wanted him to view a new charter city outside Lusaka that is also positioning itself to attract businesses.
Russia recognizes need for local crypto assets market
Amid expanding international sanctions over the invasion of Ukraine, Russia has been turning its attention to cryptocurrencies while concerns in the West are growing that the country may use them to circumvent financial restrictions. The penalties have also affected the crypto space, and Russians are finding it harder to cash out their digital holdings.
The incentives to build the Russian infrastructure for the cryptocurrency market have increased, as sanctions have led to restrictions for Russian nationals on foreign exchanges. The remark was made by Ivan Chebeskov, director of the Financial Policy Department of the Ministry of Finance, during the International Banking Day conference, Tass reported.
It has become very difficult for Russians who have invested in cryptocurrencies abroad to withdraw their funds and convert them into fiat money, the high-ranking official pointed out.
A Russian crypto market would not only allow Russians to withdraw their assets but also conduct other transactions. According to the Finance Ministry, a growing number of them are willing to transfer their coins to Russia. Some trading platforms, for example the leading South Korean exchanges, have already restricted access for Russian users.
Indonesia to impose 0.1% crypto tax starting in May
The Indonesian government is reportedly planning to charge a 0.1% capital gains tax on crypto investments as well as a value-added tax, or VAT, on digital asset transactions starting from May 1.
According to a Friday Reuters report, Hestu Yoga Saksama, a spokesperson for Indonesia’s tax office, saidthe country will be imposing “income tax and VAT” on crypto assets “because they are a commodity as defined by the Trade Ministry” and “not a currency.” The government is still reportedly considering how to implement such taxes, but legislation passed in response to the pandemic laid the groundwork for collecting revenue on cryptocurrency transactions.
Indonesia’s Commodity Futures Trading Regulatory Agency, also known as Bappebti, confirmed areport that in February 2022, crypto transactions in the country reached 83.8 trillion rupiah — roughly $5.8 billion. In addition, the number of crypto holders increased by more than 11%, from 11.2 million in 2021 to 12.4 million.