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The cryptocurrency space has been on the grayer side of the financial space since its conception. intertwinedthe government now seems to have found a way to tax cryptocurrencies.
The last year has been difficult for cryptocurrencies.Collapse from big companies like Three Arrows Capital, Celsiusand just recently FTX It has had a major impact on the government paying more attention to the crypto industry.
Bitcoin: Clear and Concrete Regulation Needed
Cryptocurrencies are already taxed through a capital gains tax, but there are no specific regulations directly taxing cryptocurrencies, only the profits made on transactions.In the first half of 2022, the Treasury Department release The “Green Book” or its tax proposals.
One section of the proposal is devoted entirely to Bitcoin and cryptocurrency brokers and how digital assets are taxed. In a nutshell, the Treasury’s proposal is as follows:
“Requires certain financial institutions to report account balances for all financial accounts maintained in U.S. offices and held by foreign nationals (including, in the case of cash value insurance or annuity contracts, cash value or surrender value). demand.”
Image: The Military Wallet
This is FATCA or Foreign Account Tax Compliance Act It essentially monitors possible illegal financial transactions by legitimate entities in the United States. If enacted, the proposal would not only give the United States access to information about assets held by the United States, but would also allow financial information about non-U.S. accounts to be shared with partner jurisdictions.
However, there is still no evidence to indicate whether the proposal has changed since the Treasury Department changed. quiet since then.
What about superpowers?
Cryptocurrency regulation is nothing new.Italy just this week passed it Similar to the United States, laws requiring traders to pay capital gains tax.regulation emerging markets The question remains of what Uncle Sam will do.
The US Federal Reserve may postpone important announcements as the wounds of last year’s devastating bear market are still healing. This may be due to the current Fear, Uncertainty and Doubt (FUD) surrounding the current cryptocurrency market.
BTC total market cap at $331 billion on the weekend chart | Chart: TradingView.com
The announcement that Bitcoin will be directly taxed could put downward pressure on the cryptocurrency market.However, such regulation strike It goes against the core tenet of crypto, which is decentralization.
However, if the U.S. government can clarify policy, it could spark renewed interest in Bitcoin and the cryptocurrency industry as a whole, boosting its growth.
However, it remains to be seen what politicians will do to make the country competitive in the cryptocurrency market.
At the time of writing, Bitcoin is trading at $17,211, up 3.6% over the past seven days, according to Coingecko data.
– Featured Image: BioEnergy Consult
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