Journal of African Development

The research paper includes an in-depth legal and economic analysis of cryptocurrency tax policies and their effects on financial stability across the globe. The research employs a qualitative and exploratory method and a systematic review of the interdisciplinary literature to examine how taxation and different legislative perceptions in various jurisdictions can influence investor behavior, fiscal governance and macroeconomic balance. The results indicate that the lack of a single international taxation system on cryptocurrencies has caused high levels of regulatory fragmentation that have led to tax evasion, regulatory arbitrage, and inconsistent levels of compliance. This inconsistency is the result of the different categorization of cryptocurrencies as property, asset, currency, or commodity that makes enforcing them difficult and undermines the fiscal stability. Economically, the study concludes that nations that have clear and stable taxation policies are characterized by a better investor confidence, market discipline, and revenue efficiency whereas nations with vague or lax regulation standards are volatile, experience capital flight, and have poor fiscal discipline.

The paper also notes the increasing systemic risks of uncontrolled decentralized finance (DeFi) exchanges and the necessity of Central Bank Digital Currencies (CBDCs) to reestablish monetary independence and decrease the illegal utilization of digital assets. The conceptual framework proposed brings together the legal, economical, and financial aspects to demonstrate how the relationship among taxation of cryptocurrencies, regulatory governance and financial stability is dynamic. It highlights that to maintain innovation, legal certainty and taxation fairness is necessary without being fiscally ill accountable. It is concluded in the study that the worldwide financial system needs synchronized taxation laws backed by blockchain-based audit systems, bilateral collaboration and dynamic legal modifications. These combined efforts would not just empower fiscal discipline and protect investors, but also convert cryptocurrencies to productive means of economic growth and stability rather than as a speculative one