Generating income from taxing income from cryptocurrencies is a great way for governments to grab a decent amount from the citizens of their country.
But at the same time if they are taxing cryptocurrencies then they will also have to come out with laws and policies to regulate cryptocurrencies to protect funds of their people.
This is where many governments are struggling in my opinion. There are no clear laws in many countries for cryptocurrencies including my country India.
Generating income from ANYTHING is great for the governments. I mean they are always lacking money, they always have corruption and use the taxes that we pay them to get themselves and their families richer, which means that they always need more money to actually help us.
If you pay them 100 bucks, 80 will go to them and 20 will go to helping us, if you pay them 120, 90 will go to them and 30 for helping us. So, it does help us to pay more taxes... in a horrible way. So, governments will always need more taxes paid just so they could get richer and also still help us more. With this new crypto taxing, they could definitely fill their pockets and maybe build a school or two.