Superbonus, Blockchain and tax credits, why don’t we talk about them?

10 November 20203 years ago babelfish

Why is there so little talk about the interest that the state should have in the blockchain ?

In some past articles , which you find in the XXI century section of the easy explained economy blog, we have mentioned the opportunity and need for the State to occupy the space created by the blockchain with mastery of means and authority.

By space we mean space for maneuver in the midst of the IT giants and beyond, which are directing not only finance and consequently the economy, but also democracies towards territories that risk becoming their monopoly.

Faced with such an abstract theme, as it may seem to those who do not chew on it, we have the duty to descend on the soil of concrete daily life.
In short, that it is only the prerogative of the upper echelons, but also of ordinary citizens. Soon we will all be conditioned by it, as has happened in recent decades in matters of the market, the economy and money.

The hope of this blog is that we start talking about it in real and simple terms. And that access to the blockchain theme be made public .

Andrea Bianconi, an expert in the sector, contacted us to have the space necessary to formulate his proposal which in other areas had been semi-censored.
Easy explained economy proposes it in full version.

Superbonus, Blockchain and tokenization of tax credits,
the great opportunity for Italy that is not mentioned

by Andrea Bianconi – (c) www.bianconiandrea.com – 2020

The day Italy reopened its borders after the lockdown – June 3 – I crossed the Brenner with overwhelming joy.
I was finally able to rejoin my family and old friends.
I was able to fill my heart and eyes again with the beauty of my homeland.
Since that day I have spent most of the summer in Italy, enjoying the unique beauties of the Dolomites, Lake Garda, my Umbria, Marche, Abruzzo and down to the Gargano in Puglia.

Blockchain this semi-unknown

I became obsessed with the idea of returning to live in my beloved land and started looking at the incentives that the government was planning. The recent Law n.34 of 2020 – known as the “Relaunch Decree” – grants tax incentives for the renovation of properties.
The aim is to improve both the energy consumption of buildings and their structural stability.
If the government's goal is to revive both the construction sector and the country's stagnant economy, this new law hides even more important opportunities for the country's economy. Just look for them.

I am surprised that no one has yet proposed or highlighted such opportunities. Unfortunately, the blockchain remains a topic that is only discussed by a small circle of specialists. Yet digitization should be one of the stated priorities of the current government.
The Italian company Fintech Workinvoice is launching a market for the negotiation of tax credits that will be granted by the Italian government under the new law.
Great idea but outdated format.

A question of trust

The critical question is once again the "trust": how to ensure that the credits are (i) original, (ii) unique and (iii) unspent by a seller multiple times with several unwitting buyers?
A system based on the control of credits by auditors will be subject to inevitable scams, through the fraudulent duplication of credits and / or their resale several times.
It is also extremely expensive, because the auditors' work must be paid handsomely. It is slow because controls take time and it is also unnecessarily complex due to the need to have different actors involved in both the management and supervision of the system.

I'm really surprised that no one said "let's use the blockchain". This is precisely why the blockchain exists. Bitcoin has ingeniously solved the problem of duplication of digital values and made trust obsolete, i.e. the need to have someone super partes to trust.

Now the Italian government has the rare opportunity to use the blockchain to successfully implement this project and create important synergies for the benefit of the country's economy.
The blockchain-based tax credit circulation system proposed below can be applied in principle to any state and to any type of credit, incentive, subsidy or value in general, which are given by governments to their citizens / businesses.

WHAT ECONOMY IS WAITING FOR US IN THE FUTURE?

BUY IT NOW

1. The tokenization of tax credits.

The Revenue Agency could issue the tax credit in the form of a digital token that runs on a public blockchain.
There are several options regarding the blockchain to be used, its governance and the type of token that represents the tax credit.
But the purpose of this article is not a technical analysis of this complex aspect, but all in all secondary.

Whoever objects that a state blockchain is redundant is right, at least insofar as the authority of the state derives from the citizens and therefore implies the citizens' "trust" in the state authorities.

But the blockchain becomes not only useful but also necessary – even for the State – if we want to fully exploit the synergies referred to in points 4-5-6 below. Conversely, a private market – such as the one currently proposed – makes little or no sense outside the blockchain.

2. Trust and double spending
(trust and duplication of digital values)

The blockchain guarantees what an auditor / auditor could never guarantee. That is, the credits are (i) original, (ii) unique and (iii) not spent multiple times. Another advantage is the resilience of the blockchain-based system to hacking, which is the scourge of any centralized platform. The latest victim was the Robinhood trading platform.

3. A free and efficient market open to all

Tax credits must circulate freely. Everyone must be able to participate in this free market, including individuals. If only legal persons were allowed to participate (as now seems likely), the opportunity would be created for a cartel of speculators to buy loans from individuals at heavily discounted prices and then resell them at large margins to professional investors on the market.

A market open to all would instead benefit everyone by letting the market establish the most appropriate discount rate.

4. The tax credit is monetized, the New Digital Lira

The tax credit can be monetized. This is one more step than making the tax credit transferable in a market like the one proposed above. Let's think about the possibility of using the tax credit just like a digital currency, stored in a wallet on your mobile phone and being able to spend it – even fractionally – for normal consumption needs.

In this case the tax credit could be converted into a new monetary unit, let's call it New Digital Lira (NLD), exchangeable 1: 1 with the Euro and supported by the credits it represents. The NLD would lubricate the entire tax credit system and bring immediate liquidity to the real economy. In this case, the market referred to in point 3 would also become redundant.
The tax credit would circulate like cash and there would be no need to sell it to third parties to make it liquid.

5. The NLD as plan B in the event of a breakdown of the euro zone and the National Tourism Portal

We all know that the risk of an implosion of the € uro system, today, is not just a school hypothesis but a real risk to deal with. Therefore any prudent EU government should have a plan B to deal with this event. Countries like Germany, Austria, Belgium, Luxembourg and some Baltic countries, for example, don't even need a plan B because they have never really abandoned their national currencies. For the Germans, for example, the German mark – unlike the Italian lira which ceased to exist for all purposes in 2011 – does not have an "expiration date".

Any German citizen can exchange the old Marks for Euros
at the Bundesbank at any time and for an indefinite period

In fact, many prudent German citizens still keep stacks of Trademarks "under the bed" … it seems well over 13 billion Euros in value.
This implies that, in the event of a breakdown of the Euro system, the Bundesbank – unlike the Bank of Italy – could immediately revert to the old Marco with minimal inconvenience to its economy. The case is different for those who, like Italy, being totally unprepared will have to suffer the disastrous consequences.
The NLD – based on tax credits – could therefore become Italy's Plan B and an effective "lifesaver" in the event of an emergency.
But there is more.

The Italian tourism sector is strong. Italy is in first place in the world, with China, for UNESCO sites (55), is the fifth most visited country in the world (128 million tourists a year) and generates over 42 billion euros in annual revenues, equal to about 5% of GDP.
The NLD could be effectively launched to pay for all tourism sector services. It would be enough to create a national tourism portal supported by the Ministry of Tourism and by all the national operators in the sector (hotels, restaurants, museums, etc.).
This portal will compete with global portals such as booking, airbnb and others.

Remove the monopoly from private giants

Such global portals exploit quasi-monopolistic positions and steal valuable revenue both from local operators and their customers (due to high transaction costs), and from the state, because they avoid local taxation by cleverly channeling income flows abroad. A National Tourism Portal would greatly benefit national operators and citizens for the much lower transaction fees and because there would no longer be the heavy commissions applied by financial intermediaries on transactions (credit cards, Paypal, etc.). The state would also recover the precious tax revenues that are currently being subtracted from these global portals located abroad and which bring nothing to the country's economy (no jobs, no investments, no taxes).

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The Superbonus article , Blockchain and tax credits, why not talk about it? comes from ScenariEconomici.it .

This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/superbonus-blockchain-e-crediti-dimposta-perche-non-se-ne-parla/ on Tue, 10 Nov 2020 07:05:12 +0000.

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Superbonus, Blockchain and tax credits, why don’t we talk about them?