On October 4, the European Parliament (EP) members approved a non-binding resolution that establishes guidelines for the cryptocurrency market. Only seven votes were cast against the resolution, which received nearly 91.3% of the vote to approve.
Crypto regulation is probably one of the top issues for governments throughout the world and so is forming a tax policy for the sector. The European Parliament is now finally making its first move toward imposing taxes on cryptocurrency transactions, while several other nations have already done so.
The resolution stated that taxes on digital assets must be fair, transparent, and practical in the case of cryptocurrencies. However, it also asks that authorities take into account a simpler tax treatment for infrequent or relatively small traders and their transactions.
The resolution recommended developing a precise and widely recognised definition of crypto assets in addition to identifying policies regarding tax evasion in the context of crypto assets.
It was also recommended to create an understandable description of a taxable event. The resolution states that converting a crypto asset into traditional fiat may be the better alternative, and the EU parliament requests that the Commission particularly evaluate this decision in addition to a general tax code for the identification of potential taxable transactions.
Even if the market cap is still a long way from $1 trillion, psychological levels have historically been a zone where trends can change. The crypto market has barely changed since September 19 and Tuesday marked the first significant change. The overall market capitalization of all cryptocurrencies increased by almost 1% over the last day to $965.61 billion. A technical indicator, if sustained, can take the total market cap past $1 trillion.
The EU Parliament passed the Markets in Crypto Assets Regulation (MiCA) law in March to assert a unified approach to cryptocurrency between all EU nations. Initially, the law included an indirect provision to ban proof-of-work mining because of its high energy usage. Many critics of the crypto watchdog dubbed it a Bitcoin mining ban in the EU.