Against the backdrop of the popularity of the NFT-project Axie Infinity in the Philippines, merchants began accepting in-game tokens Smooth Love Potion (SLP) as a form of payment. The scale of deals has reached such volumes that the Philippines’ Department of Finance took an interest in the matter, according to the Philippine Daily Inquirer.
Axie Infinity players earn SLP by completing daily tasks and winning battles against other players. The tokens can be used to create Axies or exchanged for fiat currency. For example, the asset has been listed on the Binance exchange.
The play-to-earn concept, on which the project is based, has attracted an audience from countries with relatively low wage levels, including the Philippines. According to Statista, the average monthly salary on the archipelago is around 44 600 Philippine pesos (~$894). The maximum earnings for an Axie Infinity player amount to 200 SLP per day or 6,000 SLP per month (~$850).
In the last 30 days, the price of Smooth Love Potion has fallen by 49%, according to CoinGecko. As of writing, the asset was trading around $0.14.
For exchanging SLP tokens, Filipinos use the digital wallet Ronin Wallet, which allows up to 100 free transactions per day with assets from the eponymous sidechain.
SLP is accepted as payment by dozens of merchants: from shoe sellers to auto services and cafés.
The Philippines’ Department of Finance has taken note of the situation. Deputy Finance Secretary Antonette Tianco proposed taxing Axie Infinity-related transactions, including NFT buying and selling and SLP trading.
“Whoever earns money from this currency should know that it is income — it must be reported,” Tianco said.
According to the deputy minister, cryptocurrency is an asset and is therefore taxable. She noted that this concerns income tax, though “the nuances depend on the instrument’s classification,” which the Philippines’ Securities and Exchange Commission must determine.
“Are they [cryptocurrencies] securities or currency? These are the things that will help us determine the rules by which assets will be taxed. But regardless of how we characterize them, they are subject to income tax,” Tianco added.
According to DappRadar, over the last 30 days Axie Infinity’s transaction volume exceeded $975 million. Users completed more than 1 million transactions.
In August, the projectaily audience surpassed 1 million people.
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