Today Britain will vote in the EU Referendum. The outcome of the vote will decide whether or not we remain as part of the European Union. In the lead up to the vote, the pound sterling has become extremely volatile. The currency exchange rates, driven by the huge level of trade uncertainty have fluctuated wildly in the last few weeks. With such an uncertain future lying ahead for the pound, many are looking to find safer homes for their savings. Cryptocurrency has the potential to be the perfect safe haven.
Fluctuation of the Pound
Since the beginning of the referendum debates, the pound has steadily fallen against other currencies. It has fallen 12.5pc against the Euro, 6.8pc against the US Dollar and 11.4 against the Australian. Much of this drop can be attributed to the fear of a possible Brexit. If Britain vote to leave the EU, our trade deals will have to be renegotiated. This applies not only to EU trade deals but also to those with other countries, which we rely on EU deals to reach. Paving the way for a post-EU Britain will take time. In the meantime, many may opt to sell off their sterling to mitigate the risks posed by the uncertainty.
Currency outlets throughout the UK have reported a surge in exchanges since the weekend. The Post Office Travel Money has reported that sales of foreign currency have risen by 48.8%. Online purchases have surged, with a 381% rise. The majority of buyers are exchanging their pound sterling for the Euro and American dollar. Some experts have suggested that the pound could even fall to parity with the Euro.
Cryptocurrency as a Safe Haven
Given the instability that we’ve listed above, cryptocurrency is becoming a far more favourable currency option. The main reason for this is that digital currencies such as Scotcoin are not strongly correlated with either the stock market or national currencies. The same cannot be said for the pound sterling. Therefore, now would be a perfect time to hold funds in a digital currency.
Scotcoin vs Traditional Safe Havens
In times of global financial strain, people look for safe havens. Traditionally this has meant stable valuables. Basically, items which traditionally appreciate in value regardless of the global financial climate. However, these often have many drawbacks. The most obvious problem with holding cash in fixed assets is their lack of portability. Cryptocurrency has no such barriers. It can be moved anywhere quickly and with little effort. As Scotcoin is a peer to peer system, no banks are involved. Therefore, no operating hours are imposed. You can make payments whenever you need to.
In short, your money is protected from outside political factors affecting its value. You can also use the funds as and when you need to. Digital currency such as Scotcoin offers liquidity. At present, they are also not subject to many tax impositions.
To sum up, the EU Referendum is sure to have far-reaching impacts on the UK economy. The pound sterling has already taken a hit which will only be compounded- at least in the short-term- should Britain chose to leave the EU. For those looking for a safe haven which also offers liquidity, Scotcoin presents a perfect solution.
The Scotcoin Project (TSP) in collaboration with Scotesq Ltd (Scotesq) is now offering Continuing Personal Development courses (CPD). These will cover the Blockchain (what it is, how it works, what it could be used for), Scotcoin, Bitcoin and cryptocurrencies in general.
There is a minimum of ten participants required. The full course as delivered by Scotesq costs £250 per person, but a short course complete with CPD certification is available at £100 per person.
We also offer a completely free tutorial on Scotcoin.
Anyone interested in these courses should contact us at [email protected] in the first instance. We will attempt to put together a session within your area. We are particularly interested where a group of at least ten people would like a talk in one location.
Last week, reports emerged indicating that Russia had entered into talks over the development of a new national digital currency which would operate alongside the ruble. Now, the Bank of Tokyo-Mitsubishi UFJ has confirmed that it has been undertaking its own experiments with digital currency. Both parties are huge players in the world economy. For most people, this begs the question, what is it about cryptocurrency that currently has the world abuzz?
Quite simply, digital currency stands for innovation in payment methods. Whilst at first, many regulators treated cryptocurrencies with scepticism, now they are open to the possibilities that they represent. Many governments around the world are now in agreement that resources must be dedicated to understanding and researching blockchain and its possible implementations.
Our product, Scotcoin, is a digital currency. We hope that in time it can be used to revolutionise the way we make payments in Scotland. It is decentralised and as such, is continually being improved upon. So, why should you use Scotcoin? Well, let us tell you a little bit more about our vision and the benefits of using our product.
It is our hope that Scotcoin will become an effective alternative to the pound sterling. The way we make transactions is changing. You only need to glance at a news outlet to see how payment methods are becoming more and more entwined with technology. With Scotcoin, we want to ensure that this occurs in Scotland in the right way; in the safest and most secure way. This is the reason why we operate on a secure and continually innovating counterparty platform.
In the future, you will be able to use to Scotcoin with the same ease as using pounds and pence. The number of Scotcoins is fixed at 1 billion. So, the higher the demand for the coin then the higher the value.
If you wish to purchase Scotcoin, check out our full list of vendors.
The Benefits of Scotcoin
We operate on the counterparty platform which operates on the same blockchain as Bitcoin. For those of you who are new to the world of digital currencies, this statement may mean nothing. However, we hope to provide more material to discuss why this is significant in the future. For now, quite simply, it means that our product is always being improved upon by the best minds in the world. As the blockchain is continually evolving, security is continually strengthened.
Only recently Judd Bagley of Overstock.com, one of Bitcoin’s first ever retailers stated that ‘the distributed nature of the network that verifies the integrity of the transactions and associated account balances makes a successful attack mathematically impossible.’
Peer to Peer Transactions
Unlike other payment transfer methods, Scotcoin removes the need for a bank or a building society to facilitate the transaction. In fact, it is more like using cash. As there is no bank or building society involved, there are no account numbers. Therefore, you do not have to share your information. You can ensure your anonymity.
Also, whilst banks are restricted to set operating hours, Scotcoin is not. Banks close at the end of the day, often causing delays in digital payments. Scotcoin transactions can take place all day, every day. They are completed almost instantly.
Very Low Processing Fees
With Scotcoin, you will be charged little or no processing fees for carrying out a transaction. Merchants, in particular, may find that they are losing valuable funds in processing fees for debit/credit cards or even PayPal transactions. At present, a merchant can typically expect to forfeit between 2.7-3.5% per PayPal transaction. You will face nowhere near this level of fee when using Scotcoin, meaning you keep more of the money that you’ve earned.
Digital currencies are changing the way we make transactions. Scotcoin is part of this positive change in Scotland. For further information on how you can become part of the innovation, see our merchant’s page or contact us. We want to make payments easier for everyone in Scotland. Help us achieve our goal.
Back in 2009, with the creation of Bitcoin, Government bodies around the world were tasked with dealing with a problem they had never faced before. Namely, how to treat cryptocurrencies within the scope of taxation. This has been a long process and regulation has only come to the fore in the last 2 years in the UK. It should be noted that at present Scotcoin is not taxable. However, it is expected that it may be to some degree in the future. To give you all in an idea of where Scotcoin will fall under the purview of taxation, we’ll be taking a look at the HMRC’s current stance on Bitcoin.
The last directive on Bitcoin by the HMRC was published in September 2014. In a fortunate move for digital currency traders, the UK became one of the best places for Bitcoin start-ups. The legislation outlined rules on the following taxes:
The VAT treatment of cryptocurrencies in the UK must be consistent with any treatment which may be implemented across the EU. The EU recently voted on issues surrounding cryptocurrency, which we will discuss in more depth later in the article. However, the overall message is that the EU are taking a hands-off approach to prevent stifling new innovation. At present:
- All income which comes as a result of mining activities will generally not be subject to VAT.
- No VAT is due on the value of Bitcoins themselves, where an exchange of Bitcoin to another currency takes place.
- Charges made as a result of carrying out the above exchanges will also be outside the scope of VAT.
- VAT will be levied on any goods or services which are sold in exchange for Bitcoin or any other cryptocurrency.
Corporation Tax, Income Tax and Capital Gains Tax
Businesses which accept payment for goods and services in Bitcoin will see no change in how taxable profit is calculated.
Any profit or loss on exchanges between currencies is to be taxable. For any company entering into transactions involving Bitcoin, these transactions will be recorded in accounts and will be taxed under normal corporation tax rules.
In the case of income tax, any non-incorporated business which deals in Bitcoin must declare any profits or losses in their accounts. These will be taxable under normal income tax guidelines.
Capital Gains Tax
When it comes to chargeable gains, any gains or losses incurred on Bitcoin are chargeable or allowable on capital gains tax if they accrue to an individual. They are chargeable or allowable for corporation tax if they accrue to an organisation.
How will Brexit affect Cryptocurrencies ?
As we mentioned above, how the UK treats cryptocurrencies for VAT purposes is determined by decisions made by the EU. On the 26th May, the European Parliament decided to take a hands-off approach to blockchain regulation. Instead, MEPs voted in favour of precautionary monitoring. To achieve this objective, a Virtual Currency Task Force is to be created. This task force will monitor how cryptocurrencies evolve and make recommendations for special regulation should the need ever arise.
However, if Britain votes to leave the EU then the above issues will no longer come under their purview. The UK will then have to decide on their own stance in relation to Bitcoin regulation and VAT. The Financial Conduct Authority, the financial regulator for the UK, has already expressed an interest in developing anti-money laundering regulations. This is unsurprising given that the FCA has made strengthening Britain’s AML regulations a priority over the past few years.
To conclude, although cryptocurrencies are subject to some tax regulation in the UK, Britain can still be considered to be one of the best jurisdictions to trade in digital currencies. This may change should Brexit go ahead. However, given that a ‘hands-off’ approach to regulation is favoured by UK regulatory bodies, it is unlikely that these regulations will change too drastically.