News Updates May 19, 2023
1. Swiss canton Zug increases bitcoin, ether tax payment threshold above $1.6 million. The canton of Zug, Switzerland's "crypto valley," has increased the threshold for tax payments with bitcoin (BTC) and ether (ETH) to 1.5 million Swiss francs (over $1.6 million) from the previous CHF 100,000 (over $110,000) with immediate effect.
"The increase in the limit is an important step towards the digital future," Zug finance director Heinz Tannler said in a statement on Friday. "From the second half of 2023 on, another innovation will be possible — paying taxes with cryptocurrencies directly by scanning the QR code on the payment slips issued by the tax administration. This simplified process makes paying with cryptocurrencies even more attractive."
The canton of Zug began accepting bitcoin and ether for tax payments in February 2021 after first announcing the plan in September 2020. The canton of Zug's partner for accepting crypto tax payments has been Swiss firm Bitcoin Suisse since the beginning. As part of the deal, Bitcoin Suisse converts taxpayers' bitcoin and ether into Swiss francs for the canton.
The Canton of Zug has long been an important hub for the crypto industry. The increase of the threshold for tax payments again demonstrates the leading position of the Canton of Zug in integrating cryptocurrencies," said Bitcoin Suisse CEO Dirk Klee in the statement.
Since introducing the initiative in 2021, the canton of Zug has had around 150 crypto tax transactions with a total volume of around 2 million Swiss francs (over $2.2 million), according to the statement. "Based on the positive experiences so far, the Finance Directorate of the Canton of Zug invites individuals and businesses liable for taxes in the Canton of Zug to try out the new payment channel and pay their taxes with cryptocurrencies," per the statement.
Switzerland has become an attractive hub for crypto firms over the past several years, thanks to its favorable regulatory environment and positive attitude toward digital currencies. Swiss city Zug also accepts bitcoin for tax payments via Bitcoin Suisse since 2016. The Swiss municipalities of Zermatt and Chiasso has also accepted the cryptocurrency for smaller tax payments over the last few years.
2. Binance CEO surprised dogecoin hasn't died yet, 'but Elon Musk latched onto it'
Binance CEO Changpeng Zhao expressed surprise that dogecoin had not yet faded away and said Tesla boss Elon Musk might have played a role in extending the memecoin's lifespan.
"One memecoin that really surprised me was actually dogecoin. It has had a super long-lasting power. I thought it would have disappeared a long time ago. But Elon Musk latched onto it and extended its life maybe," Zhao, commonly known as CZ, said in a Twitter Spaces "ask me anything" session on Wednesday.
Crypto markets have been hit by a renewed bout of memecoin speculation in recent weeks, led by the likes of pepe and ladys. The exchange boss — who unfollowed Musk on Twitter this week — said he doesn't understand the appeal and is not a memecoin or NFT holder as he prefers tokens with utility.
It is what it is," Zhao said. "Right now it seems to be popular. But having said that I do think there's very high risk."
Still, Zhao said he's not against memecoins. Binance, in fact, lists them, having recently supported pepe, he added. "We tend to follow what our users are active at," Zhao said.
Elon Musk endorsing and pumping Dogecoin
Dogecoin was one of the first ever memecoins, created in 2013. It was initially developed as a joke by software engineers Billy Markus and Jackson Palmer. The token is styled on the popular "doge" internet meme, which features a shiba inu dog with captions written in broken English.
Musk has been a vocal supporter of dogecoin and continues to tweet about the memecoin. He first tweeted about the token in 2019, saying: "Dogecoin might be my fav cryptocurrency. It's pretty cool." In 2021, Musk posted a picture based on the movie "Lion King" which showed him holding up a shiba inu.
The billionaire owns dogecoin, along with bitcoin and ether, according to his tweets from last year. Musk even bought some dogecoin for his youngest son. Last year, Tesla began allowing customers to buy select merchandise items using dogecoin. The carmaker also holds the memecoin along with bitcoin. As recently as last month, Musk temporarily replaced the blue Twitter bird icon with an image of the doge dog.
Musk's tweets about dogecoin have sent the token's price jumping on many occasions. Dogecoin is currently the ninth largest cryptocurrency in the world, with a market capitalization of over $10 billion, according to CoinGecko data. It is currently trading at around $0.07.
Binance's Zhao, however, personally prefers "tokens with a utility," he said in the AMA session. He said a token's "utility value is probably the strongest value." Zhao only holds bitcoin and Binance's native token BNB, according to his Twitter bio.
3. Ethereum: Payment Giant Visa Deploys First Paymaster Smart Contract on ETH Testnet
Cuy Sheffield, head of crypto at payment giant Visa, made known on Twitter the deployment of Visa's first paymaster smart contract on the ETH Goerli testnet. This comes as Visa continues to research and experiment with account abstraction and ERC-4337.
"Excited to see Visa deploy our first paymaster smart contract on the testnet as we continue to research and experiment with account abstraction and ERC-4337," Sheffield tweeted.
Excited to see Visa deploy our first paymaster smart contract on testnet as we continue to research and experiment with account abstraction.
Raj Parekh, CEO of Portal and previously at Visa Crypto, is excited about the recent advancement, saying: "A Visa-powered paymaster could be a large driver of growth for the ecosystem."
Visa previously proposed a system known as "account abstraction," or AA, wherein smart contracts can be used to enable automated programmable payments on Ethereum.
Visa publishes experiment findings
Visa has published a report on its experiments with ERC4337 (Account Abstraction). On March 1, 2023, ERC-4337 was rolled out to the Ethereum mainnet, adding the ability for smart contracts to transact on behalf of the user.
In this experiment, Visa put together two prototypes that demonstrate potential use cases of a new Paymaster flow: first, using the Paymaster to facilitate the use of ERC20 tokens to pay for gas fees, and second, completely covering the gas fees for a transaction.
In the second experiment, a paymaster contract was setup that completely covers the gas fees for user txns. In their sample implementation, the user must be whitelisted to be sponsored (L30).
In line with this, the Visa team deployed experimental Visa Paymaster contracts on Ethereum's Goerli Testnet.
It demonstrated paying with ERC-20 tokens using ERC-4337 Paymaster via the first Visa Paymaster contract, wherein it explored whether a user can pay transaction fees with alternative tokens, such as a dollar stablecoin or, in the future, even a Central Bank Digital Currency (CBDC).
Another Visa Paymaster contract was deployed, which completely sponsors transaction fees per the second use case.
In a blog post, Visa explains its current experiment with account abstraction, intending to seek out how the current AA paradigm on Ethereum offers creative solutions for dealing with transaction fees. Can users pay Ethereum transaction fees with stablecoins or other ERC-20 tokens, or not pay them at all?
It believes the findings of its experiment may help further mainstream crypto adoption.
