Indonesia's new tax hikes are a fingerprint for higher taxes in the future.

Indonesia has seen an increase in crypto trading, and now regulators are pointing their eyes at this new revenue opportunity. The agency behind this tax proposal in Indonesia is the Indonesian Commodity Futures Trade Regulatory Agency.

Cryptocurrency traders in Indonesia may soon have to start paying taxes. According to local reports, the country’s futures regulator is considering taxing all crypto transactions on licensed exchanges. According to one industry expert, the Southeast Asian country recorded US$2.8 billion in average monthly trading volume last year.

The Indonesian crypto industry welcomes tax policy. 

But of course, they do. The government and exchanges will not be the ones paying the taxes. The users of centralized exchanges will deliver the taxes, and if you are a centralized exchange, you will be okay with taxes because you are not affected by them. Your customers will end up paying it, so make no mistake here. It is only with centralized exchanges that the government can do this because there is no one to contact but the users themselves for tax purposes with DEX.

Teguh Kurniawan, the Indonesian Crypto Asset Traders Association chairman, revealed that his organization had proposed a 0.05 percent tax rate, which is lower than the tax rate for shares’ transaction value which stands at 0.1 percent. However, the regulators have yet to make any decision on this. The CEO of Indodax crypto exchange, among the largest in Indonesia, welcomed the tax proposal. 

I noticed those in favor are those who run these exchanges and are centralized. As such are forced to give your data to the local government and, in some cases, to international governments. A 0.05% tax is not on capital gains but for each trade you make. In other words, each time you trade, you become poorer and poorer. Still, you don't have to if you don't want to use decentralized exchanges to avoid this kind of thing.

And this is only one country trying to tax you just for trading. You can bet others will join the party, trying to impose their version of taxation. I guess the future is a peer to peer exchanges and decentralized exchanges. And this will also be a problem for the store of value narrative of Bitcoin BTC, which, in reality, is just a store of speculation, nothing less than that.

Store of value goes out the window.

If governments worldwide try to tax you more and more out of your holdings, they will do with centralized exchanges, which means that the store of value narrative will only be another way to get taxed. Bitcoin as a store of value means that you can only use it on exchanges. If you want to sell, you go to exchanges. Want to buy? Again to exchanges, and because transaction fees in the store of value narrative have to be higher and higher, you will be forced to park your satoshis at the same place you bought your holdings, which will mean they are the store and your custodian. All of that equals more taxes because they know your number.

Suppose the government decides that you must pay a 5% tax on Bitcoin holdings every year. In that case, you will have to comply because the one you may not have enough to get your satoshis out of that exchange, or the tax is equal to the transaction cost when it comes to taxes. The only way for governments to tax it is by using and forcing centralized exchanges to comply and give your data to them.

As a store of value, which to me is only a speculative asset, Bitcoin relies more and more on centralized exchanges because once transaction fees reach $100 for each transaction, it will be a lot harder for regular users to move their money. I think this is why exchanges are applying for banking licenses because they know that Bitcoin transaction fees will reach a level where people will be forced to leave their funds at exchanges to avoid the high costs making the exchanges banks.

The rich are promoting Bitcoin BTC as a store of value because it benefits them in the long run if Bitcoin is adopted as a store of value or speculation asset. After all, both narratives benefit them the most, and it will also put the poor out of business because the poor won't be able to afford those future taxes or costs of operation. And once everyone is using only custodian services at that point, the new banks will have the power to print Bitcoin at will; welcome to banking 2.0. More of the same, fractional reserve Bitcoin or just outright Bitcoin printing. Who will benefit the most from Bitcoin printing? The rich, of course, just like today, benefit first from central banks printing money. They will also benefit from bank 2.0 Bitcoin printing as well. And that's the reason they are promoting BTC as a store of value and not a currency.

Bitcoin Cash economy government is the serf.

But Bitcoin Cash is the real peer-to-peer currency described in the White Paper with minimal transaction cost, where rich and poor meet each other and be more prosperous as sociability. Bitcoin Cash is a peer-to-peer currency that can't be taxed if you get it from another peer without going to centralized exchanges or getting your coins through a peer-to-peer exchange. I don't have a problem with taxes; the problem is that once governments hyper-inflate their currency, they over-tax those that produce to give it to those who only consume or that didn't work.

In a Bitcoin Cash peer-to-peer economy where you pay with BCH and get your salary in BCH, the government becomes a servant of the people. With fiat money and Bitcoin Core BTC, the people are just serfs of the government and the elites.

And by the way, the tax can start at 0.1%, but you can bet that 0.1% will be 10% over time until you have nothing and you are just a serf.