Hours after financial services firm Visa announced the adoption of cryptocurrency to settle transactions on its payment network, prices for not just Bitcoin but others also witnessed a decent climb. Visa on Monday morning had said that it is the first payments network to settle transactions on a pilot basis using a stablecoin called USD Coin, meaning its value is pegged directly to the US dollar. Post announcement, while Bitcoin recovered beyond its one-week high mark of $58,000, Ethereum jumped by over 8 per cent, and Bitcoin Cash scaled up by more than 6 per cent, based on the data from Fintech Zoom.
“Eventually, we will see other financial institutions enabling the same. After all, Bitcoin is the only system in the world which is working seamlessly for the last decade without halting for a second, something that all financial institutions have been surprised at. This talks about the level of security and technological advancement that cryptocurrencies offer,” Kumar Gaurav, Founder and CEO at crypto banking platform Cashaa told Financial Express Online.
Bitcoin price moved up from $55,438 around the time of Visa’s announcement (9 am GMT) to $59,243 at the time of filing this report, up from the $58,000 mark it last touched on March 22, 2021. Similarly, Ethereum improved from $1,698 to $1,842 and Bitcoin Cash moved up from $500 to $532, at the time of publishing. Apart from Visa, institutions, and entrepreneurs including Mastercard, BlackRock, PayPal, Square, Tesla’s Elon Musk, Jack Dorsey, and more having been either engaging or dabbling with cryptocurrencies. PayPal had on Tuesday announced that its US customers will be able to convert their Bitcoin, Ethereum, Litecoin, or Bitcoin Cash to US dollars to complete the transaction.
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Importantly, Bitcoin is currently the largest financial service with a market cap of over $1 trillion, ahead of JPMorgan Chase, Visa, Mastercard, PayPal and others, according to CompaniesMarketCap. “We cannot ignore the fact, that the overall Bitcoin market cap is larger than the combined market cap of Visa, MasterCard, and all the top Indian banks. This highlights its level of existing penetration. With the finance minister’s latest statement, even we are sure that the Indian government understands that this is a payment revolution which is much ahead of validation stage now,” added Gaurav.
The government had last week made it mandatory for companies in India dealing with virtual currencies to disclose profit or loss incurred on crypto transactions, the amount of cryptos they hold, and deposits or advances from any person for the purpose of trading or investing in cryptocurrency in their balance sheets. In reply to a question in the Rajya Sabha recently, Minister of State for Finance Ministry Anurag Singh Thakur had said that irrespective of the nature of business, the total income for taxation shall include all income from whatever source derived and that the gains arising from the transfer of cryptocurrencies/assets is liable to tax under a head of income. Also, the supply of any service, if not specifically exempted, is taxable under GST and no service related to cryptocurrency exchange has been exempted. This indicated that crypto gains are taxable as income while GST is applicable on services by crypto exchanges.
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