U.S. Introduced Crypto Tax Fairness Act to Adopt Crypto As Payment Method

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U.S. Introduced Crypto Tax Fairness Act to Adopt Crypto As Payment Method

The U.S lawmakers have released Crypto Tax Fairness Act on Monday to accelerate cryptocurrencies’ adoption in the mainstream. The act aims to make digital currency legitimate as a payment method. This move can also influence neighboring countries to adopt emerging technology, and ultimately, this will help digital assets to perform well globally. India is one of the same countries that could draw inspiration for others regarding the legitimacy of digital assets.

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Representative David Schweikert and Suzan DelBene introduced the bill, and Tom Emmer supported it alongside Congressmen Dareen Soto. The U.S created act enables proper taxation structure instead of applying flat rates on the crypto gains like India. With it, investors can easily use cryptocurrencies in various ways.

The new act is more understandable than current crypto laws in the U.S. For example, imposed crypto rules require investors to report the minimum capital gains on crypto transactions, like in India. In other words, users will need to locate their profits even when paying for a coffee or pizza order in a transaction. Keeping the record of microtransactions is not practical and makes use of cryptocurrency frustrating.

So, to make virtual assets easy to use and boost their adoption, the Crypto Tax Fairness Act is introduced.

Bitcoin market capital rose to $786 billion. Source: Tradingview.com

The new act exempts crypto tax on less than $200 gains

While introducing the new act, lawmakers revealed that the most significant disadvantage of strict rules is it slows down the growth of our digital economy and inhibits the use of cryptocurrency, and they affirmed;

“The Virtual Currency Tax Fairness Act would exempt personal transactions made with virtual currency when the gains are $200 or less.”

The new act exempts crypto transactions seeing less than $200 gains. It means that crypto users will get rid of tracking microtransactions alongside the tax saving on such transfers. The bill has paved the way for the widespread adoption of blockchain as it was hard to keep track of thousands of transactions in a year. An official, Jerry Brito, expressed that the concept behind developing the act is to treat digital currency like foreign currency.

Related Reading | US Lawmakers Reintroduce Bill to Provide Tax Relief for Small Crypto Transactions

“However, virtual currency has evolved rapidly in the past few years with more opportunities to use it in our everyday lives. The U.S. must stay on top of these changes and ensure that our tax code evolves with our use of virtual currency. This commonsense bill cuts the red tape and opens the door to further innovations, ultimately growing our digital economy.” said DelBene.

Featured image from Pixaby and chart from TradingView.com

 

Source: U.S. Introduced Crypto Tax Fairness Act to Adopt Crypto As Payment Method