Mongolia: Licensed Digital Currency Starts Circulating After Receiving Central Bank Approval

  • Mongolia's central bank has licensed the contry's first digital currency.
  • The currency, Candy, already has an ecosystem built around it.

Mongolia recently saw its first licensed digital currency start circulating after the country’s central bank, the Bank of Mongolia, allowed its largest mobile telecoms operator, Mobicom, to issue it.

According to Mongolia’s official state media outlet Montsame, Mobicom’s financial arm Mobifinance was allowed to issue the e-currency to investors after a ceremonial event at the central bank’s headquarters, in which it was granted an “Electronic Cash” license.

The development reportedly comes five months after the Bank of Mongolia approved regulations addressing digital currencies in the country. These defined who is able to participate in the fintech ecosystem in the country, as well as how service providers can apply to enter it.

The telecom operator’s chief executive officer, Tatsuya Hamada, showed he was bullish on the development. He was quoted as saying:

As digital currencies have begun to circulate, ATMs and cards will become a thing of the past as well.

Mobicom’s Candy digital currency notably already has an entire ecosystem built around it. Using it, users can pay bills, shop online, or top up their mobile devices. The e-currency’s website seems to show it’s also possible to lend tokens or pay household bills with it.

Per Candy’s website, the token has “the same value as the Tugrik,” Mongolia’s fiat currency. Receiving a license from the central bank means Mobicom’s currency will be available to every “operator” in the country from October 1.

The post reads:

Mobicom Group is committed to delivering our fast-paced modern technology products and services to our customers, and we are grateful to the organizations that have supported the development of fiscal and technological advances in recent years.

While Mongolia isn’t a country in which cryptocurrency-related developments occur often, it’s been involved in the ecosystem for years as crypto mining hardware manufacturer Bitmain, which recently filed for an initial public offering (IPO) has several mines in the country.

Note: Some sentences in this article were translated from Mongolian.

How to File Your Cryptocurrency Taxes

2018 saw an incredible influx into the crypto space following the bull run of late 2017. If you bought, traded or mined cryptocurrencies during 2018, there is an important deadline approaching.

The filing deadline to submit tax returns for 2018 is April 15. Unfortunately, the process for filing taxes for cryptoassets is far from straightforward. Fortunately we’ve compiled some useful tips and software that makes the process less daunting.

The Problem

The IRS considers cryptocurrencies to be property for tax purposes, not currencies, meaning that they treat them as they would any other asset - e.g. stocks or gold. This means legally that ‘realized’ trades are classified as capital gains or capital losses.

You are only taxed on ‘realized’ gains - meaning cashing out your crypto for fiat, receiving crypto from mining, forks or airdrops, getting crypto as a salary, and paying for goods with crypto. Where it gets really complicated however, is that the IRS also considers trades between cryptoassets to be taxable events. This can prove a real headache when it comes to filing taxes.

What You Need to File Crypto Taxes

Before getting on to how this can be done more effectively, here’s a list of the information you will need to get hold of so you can file your taxes correctly.

  1. A list of all exchanges you’ve used to buy, sell or trade cryptoassets

This is perhaps the most important data for most users. For most users this will be where you converted your first fiat into crypto, and where you traded between cryptoassets in 2018. Importantly, you need complete data from all years you have bought or sold cryptocurrency, not just the tax year (2018) you are doing returns for.

       2.  A record of cryptoassets received from forks and airdrops

These tokens received will appear in your exchange data, but it is important to have a record of what the coins are and when you received them as they will appear ‘out of nowhere’ in your account.

       3. A record of cryptoassets received from mining

It’s important to keep track of any crypto you have received from mining and the date and time at which you received the payouts, as the IRS also deems this to be taxable gains.

       4. A record of cryptoassets received as income

Any cryptoassets you received as a salary, for jobs or other income - with the time and date of receipt.

       5. A record of any crypto received as a gift

Although treated differently for tax purposes, it’s important you keep a record of any cryptoassets you received as a gift.

Filing Your Taxes

For most crypto users and investors manually collecting all the required data is a long and arduous challenge, and users still will then have to prepare all the correct forms themselves.

If you’re doing it yourself and you have no formal evidence of how you arrived at the amount for your capital gains, the IRS may apply a “zero-cost basis” - meaning that they can tax you on your entire crypto holdings (as well as charging you with any penalties for incorrect filing).

The Solution

Fortunately, there is now software that makes the entire process far easier and manageable.

BitTaxer is a CPA-Approved tool that is designed to streamline the entire procedure. Designed for both individual use and for CPAs, the tool makes it very simple for users to comply with IRS guidelines and avoid the complexities of calculating the tax on their own.

All users need to do is add transaction data from their own records, or import them from their cryptocurrency exchanges and wallets and classify which transactions aren’t buys and sells. The tool guides you through the entire process.

BitTaxer then takes care of everything, calculates your correct gains and losses and provides you with all the forms necessary to be attached to your tax returns or exported to your tax software.

With the deadline fast approaching on April 15, investors and CPAs alike will benefit from the software, without having to gain the expertise needed to accurately file their crypto taxes personally.

 

This post is for informational purposes only and should not be taken as tax or investment advice. Please speak to your own tax expert, CPA or tax attorney with regard to filing your own taxes.