The truth is that one of the most loved things about Bitcoin refers to the simple fact that the currency is not governed by any major laws at this moment in time, which means that people are free to make transactions anonymously and not have to worry about too many legal aspects, which also happens to be one of the main reasons behind the currency’s popularity.
Well, things may be about to change over in the European Union, as a recent amendment to the EU tax laws could actually bring trouble to the cryptocurrency. This amendment which we will discuss in a second has the unneeded potential of making transactions more difficult. While the law doesn’t focus directly on Bitcoin, it does however say that in an effort to ensure that the Value Added Tax, also known as VAT is paid on all of the electronic transactions; companies making them will now need to record the country of residence for each of their customers. Together with this, companies which deal with electronic transactions will also need to provide proof from two sources as they record the country of residence of users who have placed orders through them, which represents a factor that makes things even harder.
While Vanessa Mock, who is an EU commission spokesperson insisted that the new law hasn’t been created with the purpose of seeking the identity of everyone in the virtual environment, companies operating online still have to prove where their customers live.
How is this related with Bitcoin? Well, whenever a Bitcoin transaction is made, it is operated with the help of a user’s IP. In the case that this law is deemed constitutional and starts being applied, then companies would have to show that they are making sufficient efforts to get access to the two sources indicating the residence of their customers, one of which would definitely be the IP address.
However, it is also worth keeping in mind that while this represents a minor obstacle in the neutrality and anonymity of Bitcoin transactions, users were never really invisible! This is so as most site track the IP of the people accessing them and Bitcoin transaction services may do the exact same thing! Anyway, this only means that the country of residence is given, but the anonymity of the user initiating or accepting a transaction may still be protected.
Based on all of these legislative events which have been closely monitored in the last couple of weeks, Bitcoin supporters will believe that the company should not be governed by any laws. However, it may be important for some basic legislation to stay in place as an effort to ensure that Bitcoin users from all around the world stay away from illegality and do not use the coin for shady transactions.
What do you personally think about the anonymity of the cryptocurrency? How about the recent amendments which are being made on the EU tax laws which could have an influence over the Bitcoin market? Let us know your thoughts in the comment section below.
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