The latest form of crypto-friendly tax reform is coming into play. Last Thursday, a new bill known as the Virtual Currency Tax Fairness Act was introduced and seeks to limit some of the capital gains taxes for those who utilize cryptocurrency to pay for everyday goods and services.
A New Crypto Tax Bill That Serves Consumers
This could ultimately serve the crypto industry quite well. One of the big things that’s getting in the way of cryptocurrencies turning mainstream is that they are not being used for what they were originally designed for. Initially, bitcoin and its altcoin counterparts came about as a form of fiat that people could use if they weren’t able to get their hands on traditional financial tools.
One of the big problems that many people face in modern society is that standard financial institutions and banks do not always grant people access to the products they’ll need to survive. For example, a bank can quickly turn someone down for a checking or savings account if their credit is less than stellar or if they have failed to make timely payments in the past.
In addition, banks can also reject one’s application for a new credit or debit card for these same reasons. Credit cards are often used today to make purchases – more so than cash – and a lack of accessible credit can easily damage one’s ability to remain afloat.
Cryptocurrencies, on the other hand, do not check one’s credit or financial history. Anyone who’s anyone can easily open a digital wallet and begin trading with ease. Unfortunately, several stores and outlets do not allow such currencies to be used to pay for goods given their volatility, which in many ways, is understandable.
If you travel to a store and buy $50 of merchandise, and then you pay for that merchandise with bitcoin, the currency could ultimately go down the next day. While you’ll still walk away with $50 in items, the store has missed out on its full revenue. Thus, many businesses have been reluctant to accept digital currencies as means of payment.
While the bill in question may not do much for crypto from a business sense, it could do wonders for people looking to spend crypto like they would traditional fiat. The bill – should it pass into law – would see all transactions with gains over $200 exempt from potential taxation. Thus, people could make big purchases with cryptocurrency and step away without having to pay any additional fees.
Could It Happen This Year?
The bill was introduced by several Democrat and Republican members of the House of Representatives. They are looking to have the bill implemented for the fiscal year of 2020.
At the time of writing, bitcoin has fallen slightly from its near $8,900 high late last week and is now trading for approximately $8,600.