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Shanghai explainer on taxation of digital currency transaction drives speculation on potential easing of China’s crypto ban
- The explainer became widely circulated on Sunday after some local crypto enthusiasts suggested that it acknowledged cryptocurrencies’ legitimacy
- The Shanghai Municipal Tax Service has since deleted the article from its public WeChat account
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An online article posted by the Shanghai Municipal Tax Service, explaining levies imposed on digital currency transactions in China, has fanned speculation among local cryptocurrency enthusiasts that it signals a potential relaxation of the country’s draconian ban on crypto operations.
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The explainer, “Common Misunderstandings Regarding Personal Income Tax on Business Income and Categorised Income”, became widely circulated on Sunday after it was published on WeChat by the Shanghai tax service on Thursday. It cited a 2008 statement by the State Taxation Administration (STA).
That prompted some crypto-themed online content creators on the mainland to suggest that taxing such transactions show authorities are starting to acknowledge the legitimacy of cryptocurrencies. The Shanghai tax service subsequently deleted the explainer on Sunday from its public WeChat account.
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The wide attention received by the Shanghai tax service’s explainer reflects the lingering hope among Chinese crypto circles that the country’s rigid ban on cryptocurrencies would be reviewed amid Beijing’s drive to expand adoption of the digital yuan.
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Is cryptocurrency too risky for China?
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China’s Ministry of Industry and Information Technology last month announced plans to draft a national Web3 development plan to suit the country’s needs, although it did not specifically mention cryptocurrencies.
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