China’s Burned Out Tech Workers are Fighting Back Against Long Hours

1The draining 996 work schedule—named for the expectation that employees work 9 a.m. to 9 p.m., six days a week—has persisted in Chinese companies for years despite ongoing public outcry. Even Alibaba co-founder Jack Ma once called it a “huge blessing.”

In early October this year, it seemed the tide might have been turning. After hopeful signs of increased government scrutiny in August, four aspiring tech workers initiated a social media project designed to expose the problem with the nation’s working culture. A publicly editable database of company practices, it soon went viral, revealing working conditions at many companies in the tech sector and helping bring 996 to the center of the public’s attention. It managed to garner 1 million views within its first week.

But the project—first dubbed Worker Lives Matter and then Working Time—was gone almost as quickly as it appeared. The database and the GitHub repository page have been deleted, and online discussions about the work have been censored by Chinese social networking platforms.  The short life of Working Time highlights how difficult it is to make progress against overtime practices that, while technically illegal in China, are still thriving.

But some suspect it won’t be the last anonymous project to take on 996. “I believe there will be more and more attempts and initiatives like this,” says programmer Suji Yan, who has worked on another anti-996 project. With better approaches to avoiding censorship, he says, they could bring even more attention to the problem.

Tracking hours

Working Time started with a spreadsheet shared on Tencent Docs, China’s version of Google Docs. Shortly after it was posted, it was populated with entries attributed to companies such as Alibaba, the Chinese-language internet search provider Baidu, and e-commerce company JD.com.  “9 a.m., 10:30 p.m.–11:00 p.m., six days a week, managers usually go home after midnight,” read one entry linked with tech giant Huawei. “10 a.m., 9 p.m. (off-work time 9 p.m., but our group stays until 9:30 p.m. or 10 p.m. because of involution,” noted another entry (“involution” is Chinese internet slang for irrational competition).

Within three days, more than 1,000 entries had been added. A few days later, it became the top trending topic on China’s Quora-like online forum Zhihu.  As the spreadsheet grew and got more public attention, one organizer, with the user name 秃头才能变强 (“Only Being Bald Can Make You Strong”), came out on Zhihu to share the story behind the burgeoning project. “Four of us are fresh college and master’s degree graduates who were born between 1996 and 2001,” the organizer said.genesis3-1-1

Initially, the spreadsheet was just for information sharing, to help job hunters like themselves, they said. But as it got popular, the organizers decided to push from information gathering to activism. “It is not simply about sharing anymore, as we bear some social responsibility,”

The spreadsheet filled a gap in China, where there is a lack of company rating sites such as Glassdoor and limited ways for people to learn about benefits, office culture, and salary information. Some job seekers depend on word of mouth, while others reach out to workers randomly on the professional networking app Maimai or piece together information from job listings.  “I have heard about 996, but I was not aware it is that common.

Now I see the tables made by others, I feel quite shocked,” Lane Sun, a university student from Nanjing, said when the project was still public. Against 996 According to China’s labor laws, a typical work schedule is eight hours a day, with a maximum of 44 hours a week. Extra hours beyond that require overtime pay, and monthly overtime totals are capped at 36 hours.125x125-1-1-1

But for a long time, China’s tech companies and startups have skirted overtime caps and become notorious for endorsing, glamorizing, and in some cases mandating long hours in the name of hard work and competitive advantage.  In a joint survey by China’s online job site Boss Zhipin and the microblogging platform Weibo in 2019, only 10.6% of workers surveyed said they rarely worked overtime, while 24.7% worked overtime every day.

 Long work hours can benefit workers, Jack Ma explained in 2019. “Since you are here, instead of making yourself miserable, you should do 996,” Ma said in a speech at an internal Alibaba meeting that was later shared online. “Your 10-year working experience will be the same as others’ 20 years.” But the tech community had already started to fight back. Earlier that year, a user created the domain 996.icu.

A repository of the same name was launched on GitHub a few days later. The name means that “by following the 996 work schedule, you are risking yourself getting into the ICU (intensive care unit),” explains the GitHub page, which includes regulations on working hours under China’s labor law and a list of more than 200 companies that practice 996.  Within three days, the repository got over 100,000 stars, or bookmarks, becoming the top trending project on GitHub at that time. It was blocked not long after by Chinese browsers including QQ and 360, ultimately disappearing entirely from the Chinese internet (it is still available through VPNs).

The 996.icu project was quickly followed by the Anti-996 License. Devised by Yan and Katt Gu, who has a legal background, the software license allows developers to restrict the use of their code to those entities that comply with labor laws. In total, the Anti-996 License has been adopted by more than 2,000 projects, Yan says. Today, 996 is facing increasing public scrutiny from both Chinese authorities and the general public.

After a former employee at the agriculture-focused tech firm Pinduoduo died in December 2020, allegedly because of overwork, China’s state-run press agency Xinhua called out overtime culture and advocated for shorter hours.This company delivers packages faster than Amazon, but workers pay the priceSouth Korean e-commerce giant Coupang uses AI to promise almost-instant delivery. But speed comes with troubling labor issues—including worker deaths.

And on August 26, China’s Ministry of Human Resources and Social Security and the Supreme People’s Court jointly published guidelines and examples of court cases on overtime, sending reminders to companies and individuals to be aware of labor laws. But even though authorities and state media seem to be taking a tougher stand, it is unclear when or if the rules that make 996 illegal will be fully enforced. Some companies are making changes.quintex-1-1-1-1-1-1-1-1-1-1-1-1-1-1-1-1-1-1-1-1-1-1-1-1-1-1-1-1-1-1-1-1-1-1-1-1-1-1-1-1-1-1-2-1-1-1-1-2-2-1-1-1

Anthony Cai, a current employee of Baidu, says working six days a week is quite rare in big companies nowadays. This year, several tech companies including and ByteDance, the developer of TikTok, canceled “big/small weeks,” an emerging term in China that refers to working a six-day schedule every other week. “Working on Saturday is not that popular anymore,” Cai says. “However, staying late at the office is still very common, which is not usually counted as overtime hours.” 

 Source: https://www.technologyreview.com

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“Guide to Employment law in Spain”

Wealth And Windfall Taxes: Still Not Ready For Prime Time

One sign that post-COVID-19 normalcy is slowly coming to the tax world is that tax authorities are increasingly being accused of launching or seeking unwarranted investigations of taxpayers. Eighteen months or even a year ago, when liquidity was paramount during the height of the pandemic lockdowns, tax authorities across the world quietly backed away from tax enforcement, giving taxpayers some grace in a difficult time. But in some countries, the grace period appears to be over.

In New Zealand, the Inland Revenue Department is seeking contact information for high-net-worth individuals so it can follow up with inquiries about their financial affairs. That hasn’t been received well by the New Zealand Taxpayers’ Union, which recently accused the department of conducting fishing expeditions that could keep the rich from moving to or investing in New Zealand.

In the United States, the Biden administration received significant blowback when it released a bank reporting proposal that would have obligated financial institutions to report data on business and personal accounts with over $600. A second iteration that would have increased the reporting threshold to $10,000 didn’t fare much better. The idea was ultimately cut from a massive budget package winding its way through the government.

The South African Revenue Service, which recently beefed up its high-net-worth unit, is reportedly assigning specific staff to each high-net-worth taxpayer to engage in ongoing dialogue, reminiscent of private banking relationships, according to a report in South Africa’s BizNews.

Overall, this activity is a sign that governments are beginning to shift to the pandemic recovery phase instead of remaining in the pandemic emergency phase. Recent budget and legislative proposals issued in various countries back this up.

Yet the tax transition to recovery has not been as smooth or decisive as previous phases: It has been more hesitant and cautious because policymakers continue to grapple with taxpayer trust issues and slow economic recovery. This is particularly true with excess profits (windfall taxes) and wealth taxes, both of which have generated a lot of discussion.

Where Are We Now?

As a refresher, tax responses to the COVID-19 pandemic have generally followed three phases. The first was about liquidity and enabling taxpayers to keep cash on hand. Many tax administrations achieved this by allowing deferred tax payments, issuing faster tax refunds, increasing business deductions, and allowing taxpayers to shift losses to other years. In that phase, taxing authorities relieved taxpayer burdens and scaled back on enforcement.

The second phase was about maintaining liquidity and starting to ease into restructuring, which requires a careful balance between maintaining taxpayers’ access to cash and instating gradual and reasonable tax increases that do not impede growth or anger taxpayers.

Finally, there is what the World Bank calls phase 3: resilient recovery. This phase is about trust. According to the World Bank, if taxpayers think their lawmakers have been evenhanded and fair over the course of the pandemic by providing adequate relief when needed, then this phase’s needed tax hikes and tax base expansions will have the greatest likelihood of public acceptance.

Windfall Taxes Are Still Rare

At the beginning of the COVID-19 pandemic, many questioned whether countries should rely on windfall taxes to pay for pandemic-related support and recovery. There has been a lot of debate, but few takers. Malaysia stands out as one of the first countries to adopt a pandemic-related windfall tax.

Malaysia

COVID-19 battered Malaysia’s economy. In 2020 the country suffered a 5.6% decline in GDP — its worst economic contraction since the Asian financial crisis of 1997. The good news is that the economy is expected to steadily recover over the next year as part of the overall global economic recovery. But riding these economic coattails may not be enough for Malaysia, which has struggled with chronically low tax revenue collection.

In the run-up to the country’s October budget release, Deputy Finance Minister Yamani Hafez bin Musa said the government was considering a number of tax measures to fund recovery, “including taxing the profits on stock investments and imposing higher tax rates on a one-off basis on companies that generated extraordinary profits during the COVID-19 pandemic,” he said.

The government made good on that promise October 29 when it released a souped-up $80 billion budget, its largest ever, which features a controversial one-time windfall profit tax. Effective 2022 corporations will pay a 33% corporate tax rate on profits over MYR 100 million (about $24 million). The first MYR 100 million will be taxed at the regular 24% corporate tax rate. The government expects that a few hundred companies will cross the windfall threshold.

Malaysia did not arrive at this decision lightly, but there is precedent. Crude palm oil producers have been subject to the Windfall Profit Levy Act (Act 592) since 1999. The act imposes a tax on profits exceeding a crude palm oil market price of MYR 2,500 per ton for Malaysia’s peninsula and MYR 3,000 per ton for the states of Sabah and Sarawak.

Since its inception, the tax has generated MYR 4.1 billion in revenue, so expanding it and imposing it on other sectors was not a giant leap and reflects feedback garnered from various stakeholders.

Underscoring that strategy, the government refrained from hiking the windfall profit tax on crude palm oil producers. Instead, it increased the profit threshold by MYR 500 for peninsular Malaysia and Sabah and Sarawak, according to Finance Minister Tengku Zafrul Aziz.

But the initial response from industry was one of general displeasure; the country’s benchmark stock index, the FTSE Bursa Malaysia KLCI, fell 2% on the announcement, and some economists are warning that consumers will bear the cost of the tax. All told, Malaysia presents a case study for other countries considering similar measures.

Canada

In Canada, the manufacturing and extractives industries — mining, quarrying, and oil and gas extraction — performed handsomely in 2020. If the government imposed an excess profits tax on large companies that performed the best during the pandemic, they would bear the largest burden, according to data from Canada’s parliamentary revenue estimator.

The country’s New Democratic Party, which sits to the left of the ruling Liberal Party, has been the most consistent advocate for an excess profits tax.

In April New Democratic Party member of Parliament Peter Julian asked the Office of the Parliamentary Budget Officer to estimate how much an excess profit tax on the most profitable companies during the pandemic would raise, using the country’s previous World War II-era excess profits tax as a model.

When Canada imposed an excess profits tax during WWII, it calculated the average yearly profits that companies earned between 1936 and 1939 and levied a 100% tax on anything exceeding that figure. Using that formula, the parliamentary budget officer investigated what would happen if Canada, which has a 15% corporate tax rate, doubled the rate on excess profits.

Excess profits would be those made in 2020 by firms that earned over C $10 million in revenue for at least one year between 2016 and 2020 and exceeded their expected 2020 profits, which the office calculated using each company’s average profit margin between 2014 and 2019.

If Canada followed this formula, it could raise C $7.9 billion, according to the office’s estimates. That said, there’s very little indication that an excess profits tax is on the table. The measure wasn’t included in the country’s 2021 budget, released in April.

It was resurrected as a campaign point during the September general election, but the New Democratic Party, which has long held a minority of seats in Parliament, underperformed in the election. Prime Minister Justin Trudeau instead wants to rely on increased tax enforcement on businesses and the wealthy and to raise corporate tax rates on large financial institutions to 18%.

United Kingdom

Before COVID-19 became a worldwide pandemic, the U.K. Labour Party suggested the country should implement a windfall profits tax on oil companies. As the pandemic progressed, other stakeholders issued broader calls for a general business windfall tax.

In March the House of Commons Treasury Committee briefly analyzed the idea of a business windfall tax in a sprawling report, “Tax After Coronavirus,” that considered the country’s options for both COVID-19 recovery and general tax reform. Lawmakers asked private industry and civil society about the feasibility and wisdom of a windfall tax and emerged from the discussion skeptical about the future of a U.K. tax.

“There are downsides to a windfall tax, including its potentially retrospective nature. There would also be complexities, including the difficulties of identifying sectors to which any such tax should apply, ensuring that such a tax is fairly targeted at firms which have benefited excessively within those sectors, and identifying the element of a firm’s profits which could be reasonably attributed to excessive profits generated by the pandemic,” the report said.

The committee thought a windfall tax would be troublesome, but it also left the door open, adding that it might not “be impossible to introduce a windfall tax in certain circumstances in the future, if that was the political choice made.”

Wealth Taxes Gain More Traction

During the COVID-19 pandemic the ultrawealthy flocked to Singapore from all around the world, seeking a sophisticated, low-tax refuge in a time of chaos. But they wound up bringing chaos of their own, driving real estate prices to all-time highs amid a frenzy to put down roots.

According to Bloomberg, Singaporean authorities have been quietly asking high-net-worth individuals and the business community their opinions on wealth taxation. On one hand, the government is loath to disrupt the multimillionaire pilgrimage, but on the other hand, growing wealth inequality within the country may require creative wealth taxation, according to the head of Singapore’s central bank.

That creativity could arrive in the form of a property gains tax or inheritance tax — neither of which Singapore has — according to Ravi Menon, managing director of the Monetary Authority of Singapore. He shied away from proposing a net wealth tax, which historically has not performed well around the world.

In early November MP Jamus Lim offered the first concrete proposal: a graduated net wealth tax between 0.5 and 2% imposed on individual net worth in excess of SGD 10 million (about $7.4 million). Net wealth above SGD 10 million and up to SGD 50 million would be taxed at 0.5%, and wealth above SGD 50 million and up to SGD 1 billion would be taxed at 1%. Anything above SGD 1 billion would be assessed at 2%.

Latin America has embraced wealth taxation more than any other region during the pandemic, with several countries, including Bolivia and Argentina, introducing or expanding wealth taxes.

The next country to watch in the region is Colombia. In April lawmakers there introduced, as part of a broader tax reform package, legislation for a one-off wealth tax that would apply a 1% tax on net assets over the equivalent of $1.3 million and 2% on net assets over the equivalent of $4 million. The tax would apply in 2022 and 2023. However, the reform package was subsequently revised following public protest, and the wealth tax component was omitted. It is unclear where the idea stands.

Meanwhile, Belgium thought the COVID-19 pandemic presented a good opportunity to resurrect its controversial wealth tax on securities accounts. A securities tax was scrapped in 2019 after a Belgian high court found that it violated EU legal principles of equality and nondiscrimination and deemed it unconstitutional.

The country’s Constitutional Court found that the 0.15% tax contained some discriminatory exclusions, like real estate certificates, without a solid justification. The court also found that the tax applied unequally because individuals who own a share of an account can potentially avoid the tax if their share exceeds €500,000.

This time around, Belgium is applying a blanket tax on all securities accounts worth over €1 million — unlike the previous version, there are no exemptions. The government says the proceeds will be used to fund healthcare, but it remains to be seen whether this new provision will also be subject to legal challenge.

In the United Kingdom, the House of Commons Treasury Committee explicitly rejected the idea of an annual wealth tax, citing design and administration challenges as well as the fact that several other countries have abolished their wealth taxes because of administrative difficulties. As for a one-off wealth tax, the committee didn’t fully write off the idea, noting that “it could be used to raise significant revenue.”

The idea of a one-off tax has been floating around ever since a group of economists from the London School of Economics and Political Science and the University of Warwick formed an independent wealth tax commission to evaluate the country’s revenue-raising options. In a December 2020 report they estimated the country could raise £260 billion over five years if it taxed individual wealth over £500,000 at a 1% rate and would raise £80 billion if it taxed wealth over £2 million.

There are design concerns with that proposal. It would likely hit middle-income earners because “wealth” for purposes of the tax would include main home values. There also are concerns over retrospectivity.

Beyond that, some worry that a one-off wealth tax would simply open a Pandora’s box if the tax is imposed and succeeds because the government could very well impose it again. For now, wealth tax conversations in the United Kingdom remain academic: The measure failed to make it into the U.K. annual budget, released October 27.

A similar phenomenon happened in Germany when the center-left Social Democratic Party, which won a plurality in the country’s recent parliamentary election, vowed to resurrect the country’s wealth tax, which had been struck down over constitutionality concerns. But because the Social Democratic Party lacks a governing majority, it is seeking a coalition with two other parties — the Alliance 90/The Greens and the Free Democratic Party — and has decided to abandon the wealth tax to make a coalition possible. So it remains an academic topic, perhaps to be resurrected at a later date.

I am a contributing editor for Tax Notes International, where I write weekly analysis on various international tax topics including European tax developments, the digital economy, base erosion and profit shifting, and tax transparency. I also write for the Tax Analysts blog. I am passionate about the intersection of tax, law, and journalism, and I look for the accessible and interesting angle in tax. Before joining Tax Analysts I was a managing editor for Thomson Reuters in New York and a senior tax reporter for Law360. I have a BA from the University of Pittsburgh and a JD from Columbia Law School.

Source: Wealth And Windfall Taxes: Still Not Ready For Prime Time

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Google Pushes to Overturn EU’s $5 Billion Antitrust Decision on Android

BRUSSELS— Alphabet Inc.’s GOOG -0.88% Google started its appeal Monday to overturn a $5 billion antitrust fine imposed by the European Union, contending that its Android operating system for mobile devices has boosted competition rather than foreclosing it.

The tech giant presented oral arguments in Luxembourg before the EU’s second-highest court, in its appeal to overturn the 2018 decision from the bloc’s antitrust enforcer. In that case, EU authorities found Google had illegally abused the market power of Android to push companies that manufacture and distribute Android phones into agreements aimed at entrenching and expanding the dominance of the Google search engine on mobile devices.

That decision was the largest of three antitrust fines totaling more than $9 billion that the EU has levied against Google in the past half decade. It also ordered changes to the distribution agreements buttressing one of the company’s biggest growth engines: search ads on mobile phones.

“Android has created more choice for everyone, not less,” a Google spokeswoman said. “This case isn’t supported by the facts or the law.”

A verdict isn’t expected for months, and it can be appealed to the EU’s top court, the Court of Justice. Still, the litigation is a new test for the EU’s competition and digital-policy chief, Margrethe Vestager, who already faces a pending appeal of an earlier decision against Google’s alleged abuse of the dominance of its search engine to favor its online-shopping ads.

Ms. Vestager has since opened a new antitrust probe into Google’s ad-tech business, along with a wave of cases exploring whether companies including Facebook Inc., Apple Inc. and Amazon.com Inc. abuse their dominance to drive out smaller rivals. The companies deny wrongdoing.

A spokeswoman for the European Commission, the bloc’s top antitrust regulator, declined to comment.

While the appeal is under way, Google has had to comply with the decision, offering all users of new Android phones in the EU a choice screen of alternative search engines. But so far Google’s market share for search on mobile phones has remained relatively stable, according to Statcounter.

At issue in the hearing this week is whether Google’s Android is indeed dominant, as European regulators argue, and whether Google’s distribution deals for the operating system and its Google Play app store for Android were anticompetitive.

The Commission has argued that Google used those agreements to block the rise of potential competitors and secure the dominance of its cash cow search engine on mobile phones—an outcome far from assured at the time.

The Commission found Google had abused its control of the Android operating system by forcing phone makers to pre-install Google Search and Google’s Chrome browser if they also wanted to include Google’s Play store for apps, by far the most common way to get Android apps.

The Commission also found Google’s so-called antifragmentation agreements—deals that discourage official Android manufacturers from selling devices that run unofficial, modified versions of Android—illegally blocked the development and emergence of competing operating systems.

“Instead of an antifragmentation agreement, it should be called an anticompetition agreement,” said Thomas Vinje, a lawyer representing FairSearch, a group representing Oracle Inc. and other companies whose 2013 complaint led the Commission to open a formal case investigating Android in 2015.

Apple and Google have one of Silicon Valley’s most famous rivalries, but behind the scenes they maintain a deal worth $8 billion to $12 billion a year according to a U.S. Department of Justice lawsuit. Here’s how they came to depend on each other. Photo illustration: Jaden Urbi

Google argues that those analyses are flawed. It says Android devices must compete with Apple’s iPhone and iPad, and the Commission was wrong to largely exclude them from its analysis. The company argues that its antifragmentation agreements are necessary to keep Android phones compatible with apps, and aren’t a barrier to creating competing operating systems.

Google also says the allegation that it blocked competing apps is false because manufacturers typically install many rival apps on Android devices, and consumers can easily download others. The company says it has a right to recoup the money it spends developing Android, which it makes available free to manufacturers, by encouraging them to install Google Search, from which the company makes the bulk of its revenue.

Google and the Commission will be joined in this week’s arguments by nearly a dozen outside companies and trade groups that have filed their own supporting briefs in the case. Google’s supporters include the Computer & Communications Industry Association and two handset manufacturers.

Arguments on the Commission’s side will include some from German publisher groups and complainants in the case, including FairSearch.

By: Sam Schechner at sam.schechner@wsj.com and Daniel Michaels at daniel.michaels@wsj.com

Source: Google Pushes to Overturn EU’s $5 Billion Antitrust Decision on Android – WSJ

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Bitcoin Has No Value: People Bank’s Of China Official Announces Further Crackdown

Bitcoin (CRYPTO: BTC) and other cryptocurrencies “are not legal tenders and have no actual value support,” according to Deputy Director of the Financial Consumer Rights Protection Bureau of the People’s Bank of China (PBoC) Yin Youping.

What Happened: According to a report by local news outlet People’s Daily Online, Youping said that cryptocurrencies are purely speculative assets. He also advised the public to increase its risk awareness and stay away from the crypto market to “protect their pockets.”

Read also: Crypto’s Biggest Legal Problems

The PBoC official also said in anticipation of the possible crypto market rebound and their related operations in China, the central bank will monitor overseas cryptocurrency exchanges and domestic traders in collaboration with relevant authorities.

What Else: The institution also plans to crack down on the space by blocking crypto trading websites, applications, and corporate channels.

Per the report, PBoC — being a member of the Joint Conference to Deal with Illegal Fund Raising — actively cooperates with the lead department of the China Banking and Insurance Regulatory Commission.

As a result of this collaboration, the regulator created systems aiming for the monitoring, early warning, publicity, education, and overall combating of illegal fundraising powered by cryptocurrencies and blockchains.

Read also: Why Bangladesh will jail Bitcoin traders

Youping explained that PBoC’s next step will be establishing a normalized working mechanism, continue putting high pressure on illegal cryptocurrency-related operations, and continue cracking down on crypto-related transactions.

Lastly, the report intimates that “if the general public finds clues about illegal fund-raising crimes, they must promptly report to the relevant departments.”

By:

Source: Bitcoin Has No Value: People Bank’s Of China Official Announces Further Crackdown

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China’s crackdown on cryptocurrencies will probably intensify and may even lead to an outright ban on holding the tokens, according to Bobby Lee, one of the country’s first Bitcoin moguls.

Lee knows what it’s like to be on the wrong side of Beijing: He sold BTC China, the nation’s first Bitcoin exchange and at one point the second biggest worldwide, in the aftermath of a crackdown in 2017.

China has launched a new campaign against cryptocurrencies this year, taking action against miners and imposing curbs on crypto banking services and trading. The moves have fueled Bitcoin’s drop to about half its mid-April record near $65,000.

“The next thing they could do, the final straw, would be something like banning cryptocurrency altogether,” Lee said in an interview at his office in a WeWork space in downtown Shanghai, without elaborating on how a ban might be enforced. “I put it at the odds of 50-50.”

Lee recently returned to China after spending time in the U.S. and publishing a book, “The Promise of Bitcoin.” He’s now focused on his latest venture, Ballet Global Inc., which produces a hardware wallet that stores cryptocurrencies. Lee is still a Bitcoin bull, predicting it could end this year around $250,000 and reach $1 million by 2025. He declined to disclose his Bitcoin holdings.

Next year will be a bear market cycle. So we’ll see Bitcoin fall back down 50%-80% from the all-time high. I think Bitcoin will have its bull cycle every three or four years in the coming years. I expect Bitcoin to pass a million, two million dollars easily in the next 10-15 years. In fact the next cycle I predict to be in the year 2024 or 2025, and that’s when Bitcoin will cross half a million dollars and might even touch $1 million.

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Tanzania Considers Crypto and Boosts Bitcoin as Nations Line Up Behind El Salvador To Embrace Decentralized Finance

Bitcoin

Tanzania became the latest country to signal its support for digital assets this weekend as its president instructed financial authorities to prepare for widespread use of cryptocurrencies, elevating bitcoin prices further after El Salvador became the first country to make bitcoin legal tender last week and Elon Musk outlined plans for Tesla to resume accepting bitcoin as a form of payment.

Key Facts

President Samia Suluhu Hassan called on the Tanzanian Central Bank Sunday to begin “working on” facilitating widespread use of cryptocurrencies in the East African nation.  While many in Tanzania have not yet embraced decentralized finance, Hassan said the Central Bank should “be ready for the changes and not be caught unprepared.

”Hassan is one of the most senior politicians to signal support for digital assets since El Salvador voted to adopt bitcoin as legal tender last week and helped give the flagging market a boost. The announcement helped bitcoin gain nearly 10% in 24 hours, nearly reaching $40,000 a token Monday morning.

The token was also buoyed on by news that Tesla would resume its use of bitcoin when there is proof the asset is obtained using around 50% clean energy.

What To Watch For

There is growing popular support for bitcoin adoption in Nigeria that also gained momentum over the weekend. Russell Okung, an NFL player of Nigerian descent, penned an open letter to the Nigerian president imploring the country to adopt a Bitcoin standard so as to avoid “falling behind.” Twitter and Square CEO Jack Dorsey, one of the most high profile crypto enthusiasts, tweeted his support of the idea a number of times over the weekend.

Key Background

While reaching its highest point in several weeks, bitcoin, along with the wider crypto market, is still recovering from a tailspin that rapidly wiped over $700 billion from the market’s value. This slump was primarily induced by Tesla announcing it would no longer accept bitcoin due to environmental concerns and China cracking down on the assets.

Support from the likes of El Salvador, alongside other countries and banks that may begin to adopt bitcoin, or other cryptocurrency tokens, the market has slowly started to recover, though remains volatile. Beyond Tanzania, lawmakers in a number of Latin American countries have expressed at least a casual interest in following El Salvador’s footsteps, including Brazil and Panama.

Further Reading

El Salvador Makes History As World’s First Country To Make Bitcoin Legal Tender (Forbes)

Tanzanian president urges central bank to prepare for crypto (Coin Telegraph)

I am a London-based reporter for Forbes covering breaking news. Previously, I have worked as a reporter for a specialist legal publication covering big data and as a freelance journalist and policy analyst covering science, tech and health. I have a master’s degree in Biological Natural Sciences and a master’s degree in the History and Philosophy of Science from the University of Cambridge. Follow me on Twitter @theroberthart or email me at rhart@forbes.com

Source: Tanzania Considers Crypto—And Boosts Bitcoin—As Nations Line Up Behind El Salvador To Embrace Decentralized Finance

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Critics:

The European Union has passed no specific legislation relative to the status of bitcoin as a currency, but has stated that VAT/GST is not applicable to the conversion between traditional (fiat) currency and bitcoin. VAT/GST and other taxes (such as income tax) still apply to transactions made using bitcoins for goods and services. 

In October 2015, the Court of Justice of the European Union ruled that “The exchange of traditional currencies for units of the ‘bitcoin’ virtual currency is exempt from VAT” and that “Member States must exempt, inter alia, transactions relating to ‘currency, bank notes and coins used as legal tender‘”, making bitcoin a currency as opposed to being a commodity. According to judges, the tax should not be charged because bitcoins should be treated as a means of payment.

According to the European Central Bank, traditional financial sector regulation is not applicable to bitcoin because it does not involve traditional financial actors. Others in the EU have stated, however, that existing rules can be extended to include bitcoin and bitcoin companies.

The European Central Bank classifies bitcoin as a convertible decentralized virtual currency. In July 2014 the European Banking Authority advised European banks not to deal in virtual currencies such as bitcoin until a regulatory regime was in place.

In 2016 the European Parliament’s proposal to set up a task force to monitor virtual currencies to combat money laundering and terrorism, passed by 542 votes to 51, with 11 abstentions, has been sent to the European Commission for consideration.

See also

References

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