Opinion: Bitcoin Can Be a Loophole for Lower Taxes

Offshore bank accounts in countries considered to be tax havens, have been used as a way to go around annual taxes for years since they ever existed, by those high-net-wroth individuals.

Given the fact those tax havens countries have attracted more attention recently, with the governments tightening the margin around the tax regulation associated with those types of bank accounts, Bitcoin is looked at today as having a potential alternative to the traditional offshore bank, being still under minimal regulations,the thing that makes it eye-catching to those looking for offshore tax haven.

Since the Panama Papers revealed how many celebrities were using offshore bank accounts, tax havens have been looked at as becoming more mainstream.

Paying low taxes is a key-reason for having an offshore bank account. However, it is not the only reason that might push someone to open an offshore account.

Investors in countries that have weak property rights tend to narrow the route to government expropriation. Hence, they use offshore holdings as means for such a purpose, or simply to hide their identity for negotiation purposes.

Bitcoin, on the other hand, can serve any of the aforementioned reasons, especially, using it means secrecy in dealing, where no one needs to know about your holdings, which means you can still keep that negotiation margin.

Being not tied to any government, Bitcoin can be an alternative to those who do not trust domestic banking organisations, on the other hand.

Investing in bitcoin is accessible to anyone basically, whereas only those with a high-net worth afford opening an offshore account as a tax haven.

Bitcoin Might Accumulate a Portion in the $20 Trillion Offshore Market

Financial analysts expect more people to turn to the bitcoin side, as more loopholes continue to get filled within time, with other restrictions in the financial space keep showing down the road.

This vision is similar to what happened when the Panama Papers were revealed, where high-net-worth individual on the list switched to other methods, to cut down their taxes.

Given that those methods are today more restricted than how they were before, there is an indication that Bitcoin might be one of the few solutions remaining to serve in this context.

Bitcoin is expected to gradually accumulate a portion of the $20 trillion market of offshore tax havens, while the ability of using Bitcoin in utilising decentralised exchange for buying tokenised assets and securities, stays in the expectations range as well.

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