The Size and Taxation of Cryptocurrency: An Assessment for Emerging Economies

Abstract

Cryptocurrency started to be used in many countries as soon as its system became widespread. Countries have begun to create their own cryptocurrencies as well. Along with this increase in the dimensions of cryptocurrencies across the world, some regulatory needs have arisen. Many countries have been regulating their legal and economic infrastructures to cover cryptocurrencies, and many others have been on a quest to do so. While developed countries have been taking certain steps concerning cryptocurrencies, developing countries do not have a well-established theoretical framework for cryptocurrencies. Furthermore, inquiry and debate are still ongoing regarding the legal dimensions of these circulating currencies as well as how they are to be handled and taxed within the economy. This chapter discussed the dimensions of cryptocurrencies in developing countries and shows the debates on taxation of these currencies. Since countries’ tax systems and taxable incomes may differ, the income category under which cryptocurrencies and income arising from such currencies will be treated and how they will be taxed are still being debated. In this regard, our aim was to determine the current situation in certain developing countries including Turkey and to put forward some policy recommendations regarding taxation.