According to the chief economist of the financial company Efficient Group, Davy Rudt, the evolution of digital currencies will soon lead to the death of traditional banks.
Speaking at a cryptocurrency event called Chain Reaction in Johannesburg, Rudt said the global economy is moving towards a decentralized model with more civil liberties and less interference from governments and centralized banks.
“I think this is the very beginning of dramatic changes in the financial system. Our understanding of payment systems and banks will soon change completely. Banks in their current form will soon cease to exist, ”Rudt said.
In addition, Rudt said the withering away of centralized banking systems would also complicate the taxation of financial transactions between people.
How taxation will change
Rudt said that “it’s much more difficult to tax what is not visible,” bearing in mind the anonymous and decentralized nature of cryptocurrencies.
According to him, the lack of direct control over money in the future will lead to a decrease in the influence of governments and significantly complicate the taxation policy of personal transactions and business operations. Governments will have to look for new ways to tax financial transactions.
According to Rudt, in that case there will be few options: this is a value added tax and property tax. In order for governments to earn money from citizens, they will also have to rely on land and transport taxes.
A senior economist at Efficient Group also explained that tax cuts on financial transactions, such as VAT and income taxes, would boost trade and payments. And this, in turn, will provide more wealth and power to active participants in the economy.