Bitcoin News Today: Governments Lock In on Crypto as Tax Goldmine and Strategic Asset

Brazil’s 17.5% flat tax on all crypto capital gains, regardless of the amount, marks a pivotal shift in global cryptocurrency taxation policy, signaling the possible end of the era of low or no tax for digital assets [1]. This move, part of the country’s broader strategy to expand revenue from financial markets, aligns Brazil with other nations re-evaluating crypto as a potential source of government income. For example, Portugal recently imposed a 28% tax on gains from crypto assets held for less than a year, shifting from a previously tax-free stance [1]. These developments highlight a growing trend among governments to integrate crypto into their tax frameworks, particularly as the asset class gains mainstream traction and offers substantial returns—Bitcoin, for instance, has delivered an average annualized return of 61.2% over the past five years [1].

The introduction of such taxes disproportionately affects smaller retail investors, who may lack the resources to adapt to increasingly complex regulatory environments [1]. In Brazil, for example, the flat 17.5% tax applies to all gains, regardless of their size, which can be particularly burdensome for small traders. Meanwhile, larger institutions can more easily absorb these costs or seek favorable jurisdictions. The broader implications for global investors are significant, as governments look to close the perceived regulatory and tax gray zone that has allowed many to treat crypto as a relatively untaxed asset.

In the United Kingdom, while crypto remains legal and regulated, the tax framework is evolving. The UK currently allows a £3,000 annual capital gains tax-free allowance for all assets, including crypto, although this threshold has already been reduced from £6,000 in 2023. The FCA has also banned the sale of crypto derivatives to retail investors, citing the asset’s volatility and risks of financial crime [3]. With government debt increasing and more UK adults now holding crypto—12% according to recent FCA data—further reductions in the tax-free allowance seem likely [1].

The global trend is not limited to tax policy. Brazil is also exploring the establishment of a Bitcoin Strategic Reserve (RESBit), valued at up to $18.6 billion, to hedge against exchange rate volatility and geopolitical risks. If approved, this initiative would position Brazil as one of the few nations actively considering Bitcoin as a strategic reserve asset [2]. The proposal reflects a broader interest in integrating crypto into national financial strategies, particularly in emerging markets where fiscal pressures are acute.

As governments continue to scrutinize crypto as both a revenue source and a strategic asset, the role of individual investors is shifting. While some countries, such as Germany, still offer tax relief for long-term crypto holdings, the days of crypto as a low-tax or no-tax investment may be numbered. The UK, for instance, is expected to align its approach more closely with the United States, tightening regulatory oversight and expanding compliance requirements [3]. These moves reflect a global convergence in the treatment of crypto, driven by its increasing significance in financial markets and the need for governments to adapt to new economic realities.

The transition from a loosely regulated asset to a fully integrated financial instrument is underway. For investors, this means greater transparency and accountability but also higher costs and reduced flexibility. As markets mature and more governments impose similar measures, the global crypto landscape is likely to become more aligned with traditional financial systems. The real question is not whether these changes will happen, but how quickly and how extensively they will shape the future of digital asset investment.

Source:

[1] Brazil's crypto tax grab signals the end of an era (https://cointelegraph.com/news/brazil-crypto-tax-grab-signals-what-s-coming-next)

[2] Brazil to Hold Hearing on $18.6 Billion Bitcoin Reserve ... (https://cryptodnes.bg/en/brazil-to-hold-hearing-on-18-6-billion-bitcoin-reserve-proposal/)

[3] Is Crypto Legal in Uk? Regulations & Compliance in 2025 (https://www.lightspark.com/knowledge/is-crypto-legal-in-uk)