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View our Tax Book 2022 which has all the taxation information you will need covering topics such as Income Tax Rates, COVID-19 Supports, Retirements & Pensions, VAT and much more reflecting all changes announced in Budget 2022. Download the UHY FDW Tax Book Request a printed copy of our Tax Book 2022 – email nicolamernagh@fdw.ie Download Contact our Tax Team Today Contact our team with any queries you have Call us +353 42 933 9955 Email us info@fdw.ie #2022 #BusinessGuide #TAX #Tax2022

“The effects from Brexit are still being felt” The April 2022 edition of Business Plus magazine is now available to read on your mobile device or desktop. The month’s issue features our very own Alan Farrelly, Managing Director and founding partner of UHY FDW. In this issue Alan provided an insight into a number of topics such as staffing challenges and effects of the pandemic and Brexit. Click here to read this edition of the Business plus magazine.  #BusinessGuide #2022 #BusinessAdvisory #UHYFDWTeam #Brexit

International Video Marks UHY’s 35th Anniversary UHY’s global network is 35 years old. In October 1986 and March 1987 the two founding firms Urbach Kahn & Werlin, US, and Hacker Young, UK, came together and launched Urbach Hacker Young (UHY) International in New York and in London. Today, with independent member firms in over 100 countries, UHY is a top 20 global accountancy network. (Source: International Accounting Bulletin World Ranking Survey) We hope that UHY – The Network for Doing Business video offers a flavour of how member firms work together across borders to support clients and help them reach their international goals; how our people work in a client-focused collaborative culture which sets UHY apart from others; and how the global footprint means clients can ask UHY experts for help and advice in over 100 countries – and growing. For more information, visit our UHY page or visit  UHY International . #UHYGlobal #2022 #BusinessinIreland #BusinessAdvisory #UHY35thAnniversary

TRAINING EQUIPS YOUR TEAM FOR BETTER CLIENT SERVICE Clients expect professional service providers to offer the most up to date expertise and advice. Naturally, they expect us to be familiar with relevant legislation changes, regulatory reform, reporting standards and so on. But rightly, they demand more. They want professional service providers that are equipped with the latest skills to help their businesses thrive in a competitive world. And that mix of skills is changing, as a result of the pandemic and the march of technology. For that reason, training should never be seen as a one-off activity that happens as part of an employee’s onboarding process and never repeated. Training needs to be a continuous journey enabling both growth in knowledge and impact within the firm as well as on client projects. In a fast moving digital world, knowledge that is current today can soon become obsolete. In fact, it has been calculated that the half-life of a work skill is four years. This could mean that every four years our skills become half as valuable. That period is likely to be considerably shorter for technology-based skills. THE KEY TO LOYALTY AND LONGEVITY To give our clients the best possible service and advice, we need to continually update our knowledge and upskill our workforce. That’s especially true after a shock such as the Covid pandemic, which highlighted the importance of digital skills around the world. But continual training serves another purpose. It helps organisations attract and retain the very best talent. It is generally recognised that top employees regard lifelong learning opportunities as a crucial employee benefit. It is easy to see why. Good employees want their firms to be successful. They also want to equip themselves to thrive in an uncertain future. Continual training is an effective way for employees to drive careers forward today, and to equip themselves for the career challenges of tomorrow, whether that means economic downturns or the encroachment of AI (artificial intelligence) into the world of work. Your top employees know that the skills that are useful today may be very different from those they will need in ten years’ time. Organisations that help them continually acquire new capabilities are likely to be rewarded with loyalty and commitment. LEARNING IS SECURING YOUR FUTURE A key point to recognise is that learning comes in numerous forms. It can mean traditional off-site classroom-based courses, though these days it is just as likely to mean webinars and classes delivered online or over Zoom. Here at UHY we provide a comprehensive range of training webinars to our member firms around the world, aimed at continually updating both the technical and ‘soft’ skills required for effective performance, and expanding the knowledge base of our global network of great people. In a profession which is continually changing, it is important to ensure the business has all the right skills on board. But learning and development goes beyond formal classes and courses. It can encompass, for example, work shadowing and mentoring. At UHY, we encourage member firms to offer secondments. These can fill operational gaps in the short term, build the skills and knowledge of the individual concerned as well as support service delivery to the client. We find that secondment is especially invaluable when it happens across borders, because it brings our professionals first-hand knowledge of the challenges businesses face when they internationalise their operations. It also exposes them to different ways of solving problems, and helps us become more effective advisors to those of our clients with cross border ambitions. KNOWLEDGE AND SKILLS ARE DIFFERENTIATORS UHY’s continual learning programme allows our professionals to update technical skills, keep up with wider developments in accountancy – whether they be international taxation guidelines or smarter tech solutions – alongside developing leadership, management, commercial and team-building skills. UHY offers lifelong learning and development opportunities because it is the right thing to do. Our network of talented people want long and fulfilling careers, and we want them to build those careers with us. By investing in their future, we are investing in the success of our clients. For more information, contact Alan Farrelly, Managing Director, UHY Farrelly Dawe White Limited alanfarrelly@fdw.ie #2022 #LatestTopics #UHYGlobal

Expert insight and analysis for world business The 13th edition of UHY Global magazine is now available to read online . UHY Global draws on the knowledge of UHY’s network of member firms to provide insight and expertise for today’s global business community in a thought-provoking, upbeat and engaging read. Topically wide ranging, many features demonstrate the breadth of expertise of UHY colleagues across the world, while others focus on news and global events. UHY Global magazine is a wide-ranging and diverse reading experience, exploring the issues and challenges of international business, themes that you may well be grappling with in today’s uncertain world. For example, the lead feature this time looks at the importance of digitalisation to the recovery of Southeast Asian economies, and how governments, businesses and individuals need to work together to plug gaps in digital infrastructure and skills. Other features focus on how the accounting profession is tackling the rise of money laundering, whether cryptocurrencies are becoming mainstream, and how Mediterranean economies are responding to Covid’s impact on tourism. There are also client stories from the network’s member firms in Slovenia and Spain. Issue 13 also includes: Client stories from Slovenia and Spain The latest member firm directory Service feature on international tax Listing of UHY services – and in the digital edition you can also click through to the new network video UHY Global’s online edition also gives you hyperlink access to source reports, additional graphics, narrative and direct contact details of UHY contributors – so if you want to find out more about any of our topics, UHY Global online makes it easy. If you prefer an offline read, the print version is downloadable as a PDF . UHY Global is not only a good read, it is also a source of valuable information about the UHY international network – our services, our commitment to quality, and a directory of offices in over 100 countries. Contact our team with any queries you may have T: +353 42 933 9955 E: info@fdw.ie #2022 #BusinessAdvisory #UHYGlobalIssue

As we emerge from the Covid-19 pandemic, the Government has eased public health restrictions and has reopened all sectors of our economy. There have therefore been amendments made to some supports provided and these are detailed below: CRSS This was a support scheme that the Government put in place to help support businesses that were significantly restricted from operating due to public health restrictions.  The Government agreed a removal of public health restrictions from 22 January 2022, therefore businesses will no longer qualify for the CRSS from that date. EWSS As part of Budget 2022, the government set out the future direction of EWSS including its graduated exit strategy. These arrangements were subsequently enhanced in response to the public health situation, namely the extension of the enhanced rates of subsidy for a further two months (across December 2021 and January 2022) and the reopening of the scheme for certain businesses as announced on 9 and 21 December 2021 respectively. The government agreed on 21 January 2022 that businesses availing of EWSS that were directly impacted by the public health regulations introduced in December 2021, would receive additional support under the scheme for February 2022 to assist these businesses as they fully reopen and emerge from the restrictions. Such businesses will continue to receive the enhanced rates of subsidy for the month of February and the graduated step-down in subsidy rates, as previously announced, will be delayed by one month with such firms continuing to receive support under the scheme until 31 May 2022. From 1 February 2022, most businesses, apart from those that were directly impacted by the public health restrictions of last December, moved to the reduced rate of support of €203 per employee, followed by the flat rate subsidy of €100 per employee for the final two months the scheme of March and April 2022. It should be noted that the full rate of Employers’ PRSI will be reinstated with effect from 1 March 2022 for all businesses, as announced in Budget 2022 and legislated for in the Social Welfare Act 2021. MEBAS The COVID-19 pandemic impacted on those in the live entertainment sector and as part of a suite of measures to support those in the sector, the Music and Entertainment Business Assistance Scheme was launched as a targeted support for businesses operating solely in the live entertainment sector that did not qualify for other business supports such as CRSS and were significantly impacted by restrictions introduced by the government under public health regulations to combat the effects of the COVID-19 pandemic. This scheme closed at 1pm on 17 February 2022 Tax Debt Warehousing Scheme In relation to the Tax Debt Warehousing Scheme, and the decision by Government last month, to extend the period where tax liabilities arising can be warehoused to the end of Q1 2022, for all taxpayers eligible for COVID-19 support schemes, it has now been agreed that this date will be extended to 30 April 2022 to facilitate the two monthly VAT return for March/April. On1 May 2023, taxpayers must agree a Phased Payment Arrangement with Revenue for the warehoused debt. Interest will be applied from the start of Period 3 until the final payment date at a rate of 3%. Source: gov.ie For more information, contact Naill Donnelly, Tax Director: NiallDonnelly@fdw.ie or Jane Jackson, Head of Payroll and Tax Compliance: JaneJackson@fdw.ie #Covid #2022 #BusinessinIreland #HR #GrantScheme #TAX

UHY FDW has announced the appointment of Niall Donnelly as Tax Director. Niall joined UHY FDW in 2018 as Head of Corporate Tax Structuring, having previously worked in PWC Dublin. Niall’s experience is primarily in the area of corporate tax, in particular the financial services industry with a focus on insurance and asset management sectors, having worked in these sectors for over 6 years. More recently Niall has expanded his experience significantly into the areas of private client wealth protection and tax structuring and VAT consultancy for all industry sectors. This appointment follows the announcement of Martina Gribben as Audit Director in 2020 and Thomas McDonagh as Quality Director in 2017 and reflects the continued strong growth at the firm. Speaking today, Alan Farrelly said; “We are delighted to appoint Niall to our board of Directors.  Niall has proven to be a valuable member of our team and has expanded the tax team to a team of 12 professionals covering all tax heads. Niall provides excellent advice, assistance and re-assurance to the clients of the firm when dealing with all tax matters.  Niall’s appointment reflects the continued growth of UHY Farrelly Dawe White Limited, specialising in helping SME clients grow and expand nationally and internationally. This requires strategic planning and Niall and the tax team play a significant part in assisting clients in their business considerations.” UHY Farrelly Dawe White are a solutions-focused, Director Led, full-service practice based in Dundalk, Balbriggan, Dublin and Newry and are proud to provide a first-class, attentive and personal service to all of our clients; from large corporates to the individual owner-managed or family-run businesses. Being an agile and forward thinking firm, we help clients with their changing needs and can assist your business to grow both nationally and internationally. UHY Farrelly Dawe White Limited are proud members of the UHY international a network of audit, advisory and tax firms represented in 102 countries around the world with 350 offices and 9500 professionals. Through the UHY network we ensure that we have the reach and expertise to help you prosper. For more information, visit: Our Team #2022 #HR #UHYFDWTeam

Driven by tourism for decades, covid was calamitous for the Mediterranean economy. A panel of UHY experts discusses whether it is time for a change in direction.  It is hard to overstate the importance of tourism to the countries bordering the Mediterranean Sea. The 29 countries that make up the region share 46,000km of often sandy coastline and a climate that is generally mild in winter and warm for the rest of the year. History has favoured the area, gracing it with a wealth of architectural and cultural gems. In addition, technological development and happy accident have placed it within easy reach of millions of people for whom an annual migration to ‘the Med’ has become part of the summer routine. The result is that, in normal times, a quarter of global tourism receipts are generated in the Mediterranean. But these are not normal times. As the world’s premier tourist destination before Covid-19, it is likely to retain that title in the pandemic’s aftermath. But visitors to Southern and Mediterranean Europe nosedived from 304 to 88 million in 2020, and other Mediterranean regions were hit harder still. How will the area react to this calamity? Waiting it out is one option, because the tourists will return eventually. But tourism is in Covid’s frontline, and a fragile recovery in 2021 could be derailed by new variants and new lockdowns in 2022, as well as a sluggish global economy. Beyond Covid, the sector faces longer term threats from both climate change and its potential fixes, including increased taxation on air travel. With that in mind, Mediterranean tourism appears to be a sector in flux. We asked UHY member firms in the region for their analysis of the situation, and their expert opinions on what tourism-dependent economies can do to meet the challenges of the post-Covid world. WAKE-UP CALL The historic sites, sandy beaches and idyllic islands of Greece welcomed over 31 million tourists in 2019, contributing around a quarter of the country’s GDP. But Covid has been a wake-up call. Total tourist receipts for the first quarter of 2021 amounted to one sixth of those from the same period in 2020, says Christos Antonopoulos, partner at UHY Axon Certified Auditors S.A in Athens, Greece. A short, sharp shock was to be expected, but Christos worries that tourism’s recovery in the region could be slow, even if current indicators are positive. “Given that the recovery from a recession primarily related to the services sector is usually slower than a recession mainly affecting the goods sector, the continuation of the situation could push the Greek economy into stagnation,” he says. The situation is mirrored across the region. Cyprus attracted just under four million tourists in 2018, a historic high. But “the pandemic hit the tourism industry very severely,” says Antonis Kassapis, director of Cypriot member firm UHY Antonis Kassapis Limited. “The economy of Cyprus has for many years been based on services, with tourism being one of, if not the most important.” GOVERNMENTS STEP IN Unsurprisingly, governments across the Mediterranean region were forced to step in to protect an industry that will be vital to post-pandemic growth. In Morocco, as elsewhere, the government prioritised tourist industry jobs. “A natural selection led to technical unemployment and layoffs, because so many establishments remained closed in the tourist seasons of 2020 and 2021,” says Najlaa Ben Mokhtar, partner and audit manager at UHY Ben Mokhtar & Co, Morocco. “The government provided a monthly allowance to workers in the sector for almost a year, to ensure companies could get back on their feet when visitors return.” Miriam López Jadraque is national marketing manager at Spanish member firm UHY Fay & Co, which has one of their offices based in the tourist hotspot of Marbella. She says the industry is pressing the government to extend the ERTE, an extraordinary Covid-related job protection scheme, until at least Easter 2022. Spain is the world’s second most popular tourist destination, and the sector’s importance to the national economy is undeniable. Tourism’s contribution to national GDP fell from 12.4% in 2019 to 5.5% in 2020, according to the Spanish Tourist Board. The Spanish National Statistics Institute (INE) announced that during the first half of 2021, 5.4m international visitors travelled to Spain compared to 10.8m before the pandemic. The summer season has been positive thanks to the vaccine rollout and a rise in domestic tourism. “Nevertheless, the occupancy figures for autumn are not looking good and the sector is already asking the government to articulate measures in advance that allow employers to make plans,” Miriam adds. DOING IT DIFFERENTLY So how should the region react to such a unique circumstance? There is confidence that tourists will return, and the first truly Covid-clear summer (at least in terms of travel restrictions) may see record numbers as sun-starved consumers spend their lockdown savings. Despite this, experts in the region are arguing the need for change. They say that the pandemic showed the vulnerability of economies overly dependent on traditional tourism. In the near future, global warming – and measures to keep it under control – may impact international tourist numbers more permanently. They urge governments and businesses to grasp the opportunity to diversify. In Spain, diversification is starting with the tourism industry itself. “Tourism companies know they need to become much more efficient in their operations by paying more attention to productivity and competitiveness. They need to become more agile and able to react faster to changes in demand,” says Miriam. The digitisation of the industry has been predicted for years. In 2020 tourism businesses were forced to act, with digitisation efforts in Spain advancing more in that year than the previous five. In Cyprus, too, there is recognition that tourism cannot return to “business as usual”, and that measures must be put in place to create a more resilient industry. “Diversification is needed not only from tourism to other industries, but also within tourism,” says Antonis. “For example, trying to attract tourists from new markets, or trying to spread tourism as much as possible over the whole year.” Najlaa says that in Morocco the immediate response to the pandemic was to try and encourage more domestic tourism. “Our clients in the tourism sector – hotels, catering, event agencies – turned to the local market to capture more national customers,” she adds. This has been partially successful, but Moroccan tourism receipts are unlikely to exceed USD 4 billion in 2021, compared to USD 8.6 billion in 2019. Greater efficiency and agility are clearly welcome. New initiatives to encourage more domestic and year-round, activity-based tourism will help to create a more robust sector. But is it enough? After the experience of Covid, do countries in the region need to think beyond the tourist dollar? AN OVER-RELIANCE? Of course, many already do. For all their reliance on tourism, Spain, Greece and Morocco are mixed modern economies with strengths in a number of areas. Despite its relatively small size, Cyprus has well developed specialisms in financial services and shipping. But local non-Mediterranean comparisons show how dependent the region is on its beaches, climate and ancient history. Germany is the eighth most visited country in the world, but in a normal year tourism accounts for around 4.5% of the country’s GDP, a third as much as Spain and less than a fifth as much as Greece. Is there an over-reliance on tourism? Countries are bound to make the most of their natural advantages, whether that’s the sandy beaches of Andalusia or the ancient wonders of Athens and Marrakesh. But Covid has emphasised the fragility of tourism as the foundation of economic stability. For that reason, Antonis says that “diversification has been a very important target for a long time in Cyprus, but it is not so easy to do.” The country’s focus at the moment is on strengthening its position as an international and regional business centre, as well as exploiting significant quantities of offshore natural gas. In Greece, Christos says that many tourist businesses are modifying their offer to attract a new breed of digital nomads – freelancers who can work from anywhere with an internet connection. Thanks to Covid, there are more of them than ever. But Greece has been badly hit by tourism downturns before, and Christos believes that for the country’s long term economic prosperity, Covid may be ‘a blessing in disguise’. “The government’s goal over the next six years is to retain tourism as a significant part of Greece’s economic activity, but also expand the country’s production base, boost manufacturing activity and incorporate new technologies in agricultural production,” he adds. Christos thinks the country is facing a one-off opportunity to diversify its economy on the basis of new green and digital industries, and that the pandemic has created the conditions for lasting change. He believes Greece will become a more attractive destination for conducting business, other than tourism, post-pandemic. In Morocco, too, the pandemic has been seen as an opportunity to widen the economic mix. In October, the country officially launched Morocco Now, an initiative designed to position Morocco as a world-class industrial and export platform and to maximise foreign investments. “This is a new economic and territorial signature of the ambitions of the Kingdom of Morocco in terms of international investments,” says Najlaa. Morocco is already the second most attractive economy for investment in Africa, with well regarded specialisms in automotive, aeronautical and textile manufacturing alongside outsourcing services. And that enthusiasm to embrace change is evident throughout the region, where the cataclysm of Covid has been met with a new focus on efficiency and economic diversity. Tourists will eventually flood back, to be met by a leaner, more creative sector in which traditional seasonal beach holidays are just one part of a wider offer. In addition, national and regional governments appear to have recognised the need to widen the area’s economic mix. The strength of their support over the next few years will be crucial in determining how the Mediterranean region rebounds from the next crisis, whether that arrives in the form of a financial crash, an extreme weather event or a global pandemic. For more information about UHY’s capabilities, email the UHY executive office info@uhy.com  or visit www.uhy.com #2022 #Hospitality #LatestTopics #UHYGlobalIssue

But what does it mean in practice? Naturally, clients expect the best possible service from providers like UHY member firms. An important way we meet that expectation is through seamless and instinctive collaboration, within our teams, offices and the network as a whole. It is no surprise, then, that working together is one of the four pillars of our network strategy. We know that when we collaborate we bring together a wide pool of knowledge and experience for the benefit of our clients. Working together makes us better auditors, tax experts and business advisors. It means we can look at a client’s problem from multiple angles and bring in additional expertise to offer a second opinion or confirm a conclusion. When clients want cross-border services, working together means collaborating to give them the best local knowledge and on-the-ground expertise, helping them achieve their international ambitions. It is known that collaboration is central to a successful business. Studies, such as that by Forbes have shown that teams which work together are more productive and innovative than teams which do not. But for a global professional services network like UHY, collaboration takes several forms, which in turn come together to form one seamless and joined up service. Internal network collaboration We collaborate as a network to share best practice, the latest research and new knowledge garnered from unique or complex client projects. We do that through our internal publications, a calendar of regional and global meetings and our network intranet, which is a comprehensive repository of articles, case studies, best-practice templates and training resources. We encourage all our member firm offices to engage in continued discussion about our strategic direction and how it can better serve clients. This ongoing conversation feeds into an annual calendar of training and development opportunities. Collaboration on client projects Clients expect us to collaborate internally and with their own teams – and sometimes with third parties too – for the best possible outcome. We want clients to see us as an extension of their own team. Internally, collaboration happens when UHY individual experts and functional teams across different disciplines work together to provide a holistic service. These specialists might be in the same office, in cross-functional client service teams, or they might be on the other side of the world. In UHY we quickly know who to call in any one of our offices and any member firm can tap into the wider knowledge of the network to help them better meet client challenges. Client stories in our bi-annual UHY Global magazine detail the ways in which our member firms come together to help clients, often on cross-border projects. Clients regularly ask for our help when auditing or opening overseas offices and subsidiaries, and acquiring foreign businesses. We offer a breadth of knowledge and experience across industries and sectors by harnessing the collective power of our network and tailoring it to each client’s needs. Collaborative Teams While collaboration often happens naturally, we also put processes in place to identify the opportunities to serve clients better. To that end, every UHY member firm has an International Contact Partner whose role it is to answer queries from international colleagues and clients alike, and oversee the progress of collaborative cross-border projects. Our Referrals Partners endeavour to ensure that cross-border work and enquiries received from – and outsourced to – other member firms, are effectively managed. In other words, collaboration is built into our systems and processes. The result we strive to achieve, for clients, is a comprehensive and seamless service and solution, whether their project involves one UHY member firm or ten. For more information, contact Alan Farrelly, Managing Director, UHY Farrelly Dawe White Limited alanfarrelly@fdw.ie #2022 #LatestTopics #UHYGlobal

Cryptocurrencies have had a remarkable year, but mainstream adoption is still elusive. Can they close the credibility gap?  What to make of the topsy turvy world of cryptocurrency? A snapshot of that world in 2021 goes something like this. In March the price of bitcoin hit an all time high of USD 60,000. By July its value had more than halved. At the time of writing one bitcoin is priced at below USD 50,000, days after reaching a new peak of USD 68,000. In June El Salvador became the first country to pass laws accepting bitcoin as a bona fide legal tender. In September, China outlawed cryptocurrency mining and declared all cryptocurrency transactions illegal. If all this sounds confusing, we’ve barely scratched the surface. Governments and central banks around the world regularly warn their citizens about the lawless nature of decentralised cryptocurrencies like bitcoin and ethereum, and at the same time draw up plans for state-backed alternatives (China is currently piloting a Digital Chinese Yuan and other nations developing the idea include Sweden, Russia and Thailand). Beneath it all, the usual arguments rage. Cryptocurrency is unstable, volatile, and a cover for criminal activity. It is still highly unsuited to everyday transactions. On the other hand, some investors are happy to ride the bitcoin rollercoaster because that is where big profits potentially lie. Others argue that the original reasons for bitcoin’s creation still stand. Fiat currencies are controlled by authorities that can – should they wish – devalue them with the stroke of a pen, or deny citizens access to their bank accounts. By cutting out the middlemen, cryptocurrencies avoid these risks, and can also reduce the cost of some transactions. IMPOSSIBLE TO CONTAIN That is a very basic summary of a highly complex situation, but it hints at the competing forces at work. Authorities are highly suspicious of cryptocurrencies, because they are impossible to control, difficult to regulate and make financial markets more turbulent. A majority of the public in many countries thinks the same way. At the same time, there is a momentum behind cryptocurrencies that is proving impossible to contain. The popularity of bitcoin, ethereum and the rest explain the emergence of stablecoins (cryptocurrencies pegged to fiat currencies, usually the US dollar, or a commodity like gold) and state-backed digital currencies. And their popularity is rocketing, despite the warnings of central banks. Recent research revealed that global adoption of cryptocurrency grew by 881% in the year to August 2021, with Vietnam, India and Pakistan leading the way. The research, by blockchain data firm Chainanalysis, is designed to capture cryptocurrency adoption by ordinary people rather than investment funds. Chainanalysis puts the popularity of cryptocurrencies in Vietnam partly down to a young, tech-savvy population with few options around traditional Exchange Traded Funds (EFTs). Thanh Nguyen, partner at UHY’s Vietnamese member firm UHY Auditing & Consulting Co Ltd, agrees. “The crystal clear reason for crypto’s popularity in Vietnam is the perceived return on investment,” he says. “If you look at bitcoin’s remarkable recent recovery, it is easy to see how lucrative an investment could be, despite no legal protection under current local laws.” Ukraine comes fourth in the Chainanalysis survey, dropping from first place in 2020. Again, cryptocurrency adoption is led by a tech-native population, in this case alongside a vibrant start-up environment. Ukrainian companies regularly use cryptocurrency for business-to-business and cross-border transactions, sidestepping cumbersome banking processes. But there are also more opaque reasons for preferring cryptocurrency over legal tender. “I agree that using cryptocurrencies opens huge opportunities for business, for making payments, as well as for market speculation,” says Olha Irzhytskaya, business development manager at Ukrainian UHY member firm LLC AC UHY Prostor Ltd. “But I think it is also a convenient way to legalise income. Over 46,000 bitcoins were recently discovered as intangible assets in the declarations of civil servants in Ukraine. Such a large amount may be explained by the fact that it is practically impossible to track the origins of cryptocurrency.” A DRIVER OF CRIME? Proponents have no problem with that, considering the lack of traceability around transactions is one of cryptocurrency’s benefits. Inevitably, authorities take a different view. Cryptocurrency is struggling to shake off its reputation as a driver of nefarious online activity. “Cryptocurrencies are by their nature extremely difficult to regulate and therein lies the problem,” says Andrew Hulse, a partner at UK member firm UHY Hacker Young. “For this reason they are the currency of choice for illegal activities. With this in mind, would any national government really want to be engaged in activity that supports drug dealing, modern slavery and terrorism whilst at the same time damaging the environment?” That concern partly explains why El Salvador is currently the first and only country to make cryptocurrency legal tender. Another reason, according to Andrew, is that it remains difficult to report – and therefore tax – transactions that do not pass through financial intermediaries. “At a time when governments are at last working together towards a minimum corporate tax rate, it is no surprise that crypto has not been recognised as legal tender,” he says. Andrew hints at another reason which might dissuade national governments from legitimising cryptocurrency. Mining cryptocurrencies like bitcoin requires massive computing power and therefore consumes huge amounts of energy, potentially damaging efforts to reduce carbon emissions. CRYPTOCURRENCY AND CREDIBILITY But while there is no queue forming to follow El Salvador’s lead, and indeed the decision has caused unrest in the country, very few governments have outlawed cryptocurrency entirely. At the same time, bitcoin especially is gaining credibility as an investment vehicle, despite its inherent volatility. The first bitcoin electronic funds transfer (EFT) recently made its debut on the New York Stock Exchange, creating a more conventional way to invest in cryptocurrencies. Fintech companies not directly linked to cryptocurrency trading, like PayPal, Venmo, Square and Robinhood, now offer the option to buy and trade bitcoin within their apps. There are also suggestions that cryptocurrencies could soon gain more real world applications. A few major companies – Microsoft and Starbucks are two – now accept bitcoin payments (though in Starbucks’ case only through their app). Considerable excitement was recently generated by an Amazon job listing for a “digital currency and blockchain product lead”. Experts say that Amazon’s acceptance of cryptocurrencies as payment could trigger a domino effect that pushes bitcoin into the mainstream. In other words, away from China and a few other notable exceptions, government efforts to contain the bitcoin storm look to be in vain. Instead, there are increasing calls for regulation, which could make cryptocurrencies safer for investors and less appealing to criminals. In Vietnam, Thanh says that cryptocurrency is at the crossroads. “In the short run, it is still a great investment channel. In the longer run, it depends on how the Government shapes policy around cryptocurrency. My view is that if the Government further legalises cryptocurrency, it will become mainstream. There are hints that the Government may consider regulating cryptocurrency in the not too distant future.” The same may be true of Ukraine, where widespread adoption of cryptocurrency may force the Government’s hand. “There is no legal definition of cryptocurrency in Ukraine and the cryptomarket is, in fact, a shadow market,” says Olha, but adds that new regulations are in the pipeline. “The law has not come into force yet, but we expect that in the near future the issue of cryptocurrency recognition and cryptomarket regulation will be guided by law.” OBSTACLES TO OVERCOME Despite this activity, it is too early to tell if we are on the cusp of widespread mainstream adoption of cryptocurrency. There are still obstacles to overcome. Despite bitcoin’s apparent popularity, the Ukrainian central bank currently refuses to recognise cryptocurrency as anything other than a store of value. It cannot be exchanged for property, goods, works or services. The same is true elsewhere. But regulation provides credibility and, around the world, authorities have started to recognise that they have a duty of care towards cryptocurrency investors. A recent US Government report outlines legislation that would bring more regulation to the cryptocurrency market. US lawmakers have repeatedly expressed concern over the lack of regulation of bitcoin, ethereum and others. If laws governing the use of cryptocurrency are enacted, the only thing stopping mainstream adoption – at least by the investment community – may be bitcoin’s own remarkable rise, and the suspicion that creates. “History is full of examples of bubbles – from tulips to trains to dotcom startups – and crypto has all the same hallmarks,” says Andrew. “Will they go the same way? Only time will tell.” For more information about UHY’s capabilities, email the UHY executive office info@uhy.com  or visit www.uhy.com #LatestTopics #2022 #UHYGlobalIssue #Finance #Cryptocurrency