China’s implementation of taxes on cryptocurrency transactions signals the country's increasing embrace of digital currencies, according to Justin Sun, founder of TRON DAO.
Tax authorities in China have begun imposing a flat 20% tax on cryptocurrency transactions.
In a series of Twitter threads on Monday, he said this tax policy is viewed as a step towards proper regulation of the growing crypto market in China.
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Taxes on crypto transactions is a clear indication that the Chinese government recognizes cryptocurrencies as a legitimate form of wealth and wants to ensure its proper taxation, Sun explained.
"The tax policy is expected to boost the adoption of cryptocurrencies in the country, as it provides a clear regulatory framework for individuals and businesses,” he stated.
The increasing use of cryptocurrencies in China will prompt further regulation by the government, providing greater legitimacy and stability to the crypto industry, he added, calling the development a positive step for the global cryptocurrency market and may serve as a precedent for other countries to follow.
Companies such as TRON and Huobi are driving the growth and development of blockchain technology in China, Sun says.
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