Reports by Italian newspapers say that the Italian government has proposed a tax on cash and other valuables hidden in bank vaults. Matteo Salvini, the Italian Deputy Prime Minister (DPM), was quoted while on a late-night TV show saying that his country’s banks held billions of Euros worth of assets in safety deposit boxes.
DPM Salvini additionally suggested that these “substantially hidden” assets were being kept away from income from tax authorities. According to the reports by the dailies, Italians who were forthright on the holdings in their safety deposit boxes would be taxed at “low rates” of 15 percent.
Salvini also claimed that the taxed assets would help release assets kept outside banks. He said that the move was aimed at re-introducing the hidden cash back to the market. The deputy prime minister is of the opinion that the move would also bring out additional assets “kept under the mattress.”
Bitcoin (BTC) Will Soar
The Italian government is currently facing the looming threat of a €3 billion fine from the European Commission. The penalty has been brought on by Italy’s non-compliance with EU’s regulations in regards to its escalating debt crisis. The Italian response, however, has been to levy new taxes, introduce budget cuts, and increase VAT.
Anthony Pompliano of Morgan Creek digital says that the Italian government’s move is good for Bitcoin. In a tweet, he wrote:
“Italy’s Deputy Prime Minister has proposed a plan to “tax” money and valuables held by citizens in their individual safety deposit boxes. Don’t be surprised if more people around the world start looking for a non-censorable, non-seizable asset to store their wealth in.”
Bitcoin is a global, borderless digital currency that cannot be controlled by any government or bank. The cryptocurrency’s transactions are indelibly recorded on blockchain. For Italians, Hodling Bitcoin might become a better alternative to save their assets. Moreover, it will keep its assets from the reach of a cash strapped government.
Economic Upheavals Boosting Adoption
The European markets are in turmoil thanks to heightened geopolitical tensions. A Financial Times report says that Eurozone’s share prices are at a five-month volatility peak. Pressures from the escalating Brexit debate and US-China trade wars have made traditional markets severely unstable.
In addition, the threat of the Iran nuclear accord collapse is intensifying the market’s instability. With the Italian retail deposits hitting an all-time new high, Italians might only have Bitcoin left as a safeguard for their assets. Its volatility, however, might be a hindrance to massive adoption.
In countries like Venezuela, which has a daily inflation rate of almost 3.5 percent, Bitcoin has become a safer store of value than the Bolivar. Many Venezuelans consequently store all their money in Bitcoin form only exchanging back to fiat what they need to get along.
While the American dollar can be used as an alternative, it also is controllable by the government. According to Coin Dance, crypto trading levels in February hit a $8.76m mark per week. Bitcoin, consequently, has become the asset to turn when an investor wants total control of their savings.