US Government Rolling Out New Rules Relating Cryptocurrency

  • Since the beginning of this year, the US government is bringing new rules regarding crypto industry
  • The government seems understanding the deep technology
  • Allowance of blockchain technology has created competition among financial banks
  • The rules of FinCEN is cutting the nation from innovations happening around the world
  • The IRS is making sure whether crypto taxes are being paid

The United States official authorities have plans to boost the cryptocurrency taxes, clarify legal liability relating to the STABLE Act, and require more identification reporting. The rules include, a checkbox for crypto purchases on the IRS’s tax return form, new KYC requirements from the Financial Crimes Enforcement Network (FinCEN), and banks can use nodes for blockchain networks, and with compliance of the proposed STABLE Act, can issue stablecoins.

US government now understands deep technology

According to Alex Tapscott, a blockchain investor, author, and corporate advisor, the STABLE Act is profoundly troubling the industry. In a recent interview with Forkast, Tapscott pointed out the difficulty of nodes, which differs between stablecoin transactions and everything else on other blockchains. He also mentioned that it seems like the lawmakers don’t have access to all the facts, and they don’t understand about deep technology. 

OCC’s allowance brings competition in the banking sector

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Preston Bryne, a technology lawyer, believes that individual users would not face liability. Additionally, Brune mentioned that the legal provisions for information content providers would grant immunity from liability for its users’ actions. However, the OCC’s announcement has clarified and set a stage for transferring node ownership to financial institutions. As the OCC allows the use of blockchain, banks will face competition to move funds faster. And blockchain technology could provide the missing piece of the solution puzzle.

FinCEN cutting the US from innovations happening globally

FinCEN has proposed several aggressive reporting rules which saw vocal pushback. The rules include, crypto exchanges to report transactions exceeding a minimum threshold, similar to banks report with large wire transfers. And crypto wallet providers will also have to require KYC. Considering that, Brian Armstrong, the CEO of Coinbase, mentioned in a tweet that the idea is reasonable on the surface. Still, it isn’t possible to bring in practice, which could affect crypto financial services, cutting them off from innovations happening globally.

No escape from crypto taxations

The Internal Revenue Service (IRS), needs to gather the data to know how much cryptos are being traded in the nation. Following a recent document of the IRS, the tax return form will contain a section asking if the filer has engaged with digital currency during the past year. Purchasing cryptos is not taxable but earning profit by selling is. Observing the scenario, it seems like the IRS wants to make sure taxes are paid.

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Ahtesham Anis
Ahtesham Anis is a Computer Science undergrad student currently based out of India. Coming from the business background and his keen interest in Cryptocurrency and Blockchain technology is what Ahtesham brings to the table. He is always an eager learner when it comes to exploring the new technologies and topics in the crypto world.

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