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Cryptocurrencies are a largely untethered domain in the virtual world. These aren't owned or regulated by any individual or group. There are a lot of questions floating around regarding the safety and legitimacy of crypto and Blockchain. The advent of such AI technologies has expanded the realm of possibilities of what can be done through the Internet.
The concept of untouchable money has been a bit odd to understand completely. When cryptocurrency first gained ground, people were excited by the freedom it brought. However, the alarming rise in illegal activities and shady transactions urged legislations, including Congress, to regulate this technology.
Till the end of 2019, American legislation has passed 22 bills regarding cryptocurrency regulation. These bills are mainly focused on public policy and safety, economic and industry regulations, and tackling illegal use of crypto.
However, Congress is also aware of the positive and advantageous uses of cryptocurrency in various industries. So far, here is what the American legislation has considered in its efforts to make cryptocurrencies beneficial for the US.
Cryptocurrencies and the US Sanctions
Economic superiority is the first and foremost state policy concern in the US. Currently, Congress is focused on how crypto and Blockchain can be used to evade US sanctions. America is an economic superpower in the world. From out-casting small groups and organizations to sanctioning entire countries, it's capable of doing a lot. But with a currency that does not need elaborate trading licenses, this American pride could be threatened.
Crypto transactions are way easier than regular money transactions. Therefore, it is easier to fund terrorist groups, foreign interference missions, human trafficking, money laundering, and evading sanctions.
Supporting Local Economic Ecosystems
American legislation does recognize the benefits of cryptocurrency for regional and local economies. In recent years, many essay examples samples have highlighted how useful cryptocurrency be for small businesses. It isn't challenging to find an essay about human rights advocating the use of cryptocurrency for economic strengthening at the grassroots level.
States like Wyoming, Colorado, and Arizona have started with attempts to legalize and mainstream cryptocurrency and Blockchain for small businesses. The American legislation and state-level authorities are introducing crypto-friendly jurisdictions to build people's legitimate trust in this technology. The legislation does not have a problem with controlled, legal transactions.
The Use of Blockchain Technology by the US Government
The US government has planned on making Blockchain and cryptocurrency beneficial for the empowerment of trade as well. The Blockchain Promotion Act of 2019 focuses on two key areas where the exploration of Blockchain can benefit economies. First is the usability of Blockchain and crypto in Export-Import Bank.
This step aims to encourage free and fair trade. It also encourages people in the trade sector to keep a record of transactions using intelligence and Federal laws. The supervised use of Blockchain and crypto in trade will make trade much easier and less complicated. If governed with precautions, cryptocurrency can avoid the complex barriers in the US economic structure while allowing legalized capital earning.
Another reason why Congress aims to implement cryptocurrency is that it can help marginalized communities achieve their financial independence. Orphans, disabled, migrants, and the black female community can legitimately benefit from this venture, too. The legislation aims to allow start-ups and low-income businesses to benefit from crypto to increase their revenue. These measures, with appropriate regulation, will also contribute to national economic growth.
Taxation
Under the IRS Notice 2014-21, Guidance on Virtual Currency (March 25, 2014), virtual currency is identified as property rather than currency. The property tax laws that are applied at the state level are also applicable to cryptocurrency.
So, for cryptocurrency transactions, you need to maintain details such as the ones listed below:
- the capital gain on purchase of cryptocurrency
- the capital gain on sale of cryptocurrency
- the record of sales and purchase
- the taxation on the fair market value of mined cryptocurrency
For individual tax filing procedures, individuals need to identify crypto as a possession and a means of the capital asset as well. Just like other property, the date, time, volume, and purpose of crypto transactions are also mandatorily disclosed.
Conclusion
The mining, possessing, purchasing, selling, and transacting of cryptocurrency is quite different from paper or digital currency. The US economic and banking structure is centered around these latter two. The bills and laws regarding cryptocurrency are bring designed to regulate crypto. It's a priority of the legislation that the regulatory rules do not stifle individual freedom to trade and invest in cryptocurrency.
Disclaimer
The views and opinions expressed in this article are solely those of the authors and do not reflect the views of Bitcoin Insider. Every investment and trading move involves risk - this is especially true for cryptocurrencies given their volatility. We strongly advise our readers to conduct their own research when making a decision.