China's Ministry of Finance announced on Sunday that it will cut the stamp duty on stock trading from 0.1% to 0.05%, effective Monday.
China is reducing its stamp duty for the first time since 2008, when it cut it from 0.3% to 0.1%. This move is expected to revive the stock market, which has been under pressure due to tight liquidity and regulatory pressures.
The stamp duty cut could also have implications for the crypto market, as some cryptocurrencies are affiliated with or partnered with Chinese companies.
- For example, Conflux (CFX) was chosen by XiaohongShu, a popular social e-commerce app in China, for blockchain integration purposes.
- Phoenix (PHB) token is linked to Wechat and Tencent.
- Cocos BCX with its old name and COMBO with its new name are affiliated with Alibaba.
- There were developments as VeChain (VET) expanded its partnership with Walmart China a few months ago.
- Alchemy Pay (ACH) formed a partnership with ZD Group.
- IOST announced that it will cooperate with Hashkey.
Stamp duty on stock transactions is a type of tax that some governments impose on buyers and sellers of stocks or securities. The tax is usually calculated as a percentage of the transaction value and is charged by the exchange or the broker that issues the contract to traders.
A reduction in the stamp duty may reduce transaction fees in the Chinese market, resulting in increased liquidity and efficiency, resulting in volatility.
*Not investment advice.