U.S. Wants to Tighten Crypto Currency Regulations, Explores Own Digital Currency

When capitalization of popular cryptocurrencies hits trillions of dollars, they immediately attract attention of various government agencies and taxation authorities that aim to regulate and tax them. According to a report from Reuters, this week the U.S. Treasury proposed to treat cryptocurrency deals like cash deals and report all sizeable transfers to the Internal Revenue Service (IRS). Meanwhile, the head of the U.S. Federal Reserve said that cryptocurrencies pose risks to financial stability.

For years. cryptocurrencies like Bitcoin, Ethereum, and Chia have been on an uncharted territory, hidden from the eyes of regulators and tax authorities. People who mine cryptocurrencies and buy certain products or services using them do not report about their income and spending. Since transactions are made in an de-centralized system, it is close to impossible for authorities to control it. Such an opportunity arises when people convert real money to crypto and vice versa, which is what happens when cryptocurrencies become investment instruments for millions of people worldwide. For obvious reasons, taxation authorities do not want to miss it.

The Biden administration proposal to strengthen tax compliance includes a obligation for transfers of at least $10,000 to be reported to the IRS, which basically means that the U.S. government wants to treat crypto like regular cash, reports Fortune.

“As with cash transactions, businesses that receive cryptoassets with a fair-market value of more than $10,000 would also be reported on […] [in order to] minimize the incentives and opportunity to shift income out of the new information reporting regime,” a statement of the Treasury Department regarding the tax-enforcement proposals reads.

Jerome Powell, the head of the U.S. Federal Reserve, said that cryptocurrencies pose risks to financial stability as they are unregulated and therefore unprotected. Furthermore, they could be used for tax evasion. Meanwhile, he admitted that the U.S. central bank is exploring the possibility of adopting its own central bank digital currency (CBDC).

“To help stimulate broad conversation, the Federal Reserve Board will issue a discussion paper this summer outlining our current thinking on digital payments, with a particular focus on the benefits and risks associated with CBDC in the U.S. context,” said Powell. “As part of this process, we will ask for public comment on issues related to payments, financial inclusion, data privacy, and information security.”

Treating cryptocurrencies like cash and regulating transactions is not something that will make early adopters of Bitcoins very happy. But regulation may actually enable broader adoption of cryptocurrencies because they are going to gain more trust from the banks and from cautious individuals. Meanwhile, regulated CBDCs is a way for governments to start phasing out traditional cash and replace it with digital currencies.


RSS Latest Press Release

  • Confort Prestige | Climatisation & Chauffage Announces HVAC Services For Improved Energy Efficiency
    TERREBONNE, QUEBEC- NOVEMBER 14, 2021- Premier heating and cooling company Confort Prestige is excited to share HVAC solutions with domestic customers in the Terrebonne area. These services aim to save customers money on their heating and cooling expenses throughout the year.   Since its debut, Confort Prestige has been committed to customer service. This starts […]
  • Hundreds of Car and Truck Parts Available from Salvage Specialist
    Morganville, NJ – When it comes to finding an auto part for a foreign or domestic vehicle, Trilenium Auto Salvage usually has the answer.   The Morganville, NJ salvage specialist has hundreds, if not thousands, of parts and components at its Tennent Rd premises available.   Trilenium Auto Salvage is one of the busiest salvage specialists […]
  • Flowsent Weed Delivery Offers the Fastest Weed Delivery Service in the Bay Area
    Bay Area, CA - As it becomes easier to get cannabis in different stores and online, weed delivery in Oakland, San Francisco, and other Bay Area cities are becoming more common. People are looking for the easiest way to get their hands on high-quality, safe cannabis, and nothing beats direct to your door.    Many […]
  • Cannamazoo Now Offering the Top Cannabis Concentrates in Michigan
    What are Cannabis Concentrates, Oils, and Extracts?   Kalamazoo, MI - You may be familiar with recreational cannabis in its usual form, but have you ever tried extracts, oils, and concentrates? Each of these forms offers unique effects and benefits that smoking cannabis flowers can't provide. Simple dosing, cleaner effects, and better taste are just […]