Cryptocurrancy working group established in congress

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Things have been really running at high speed since last week's G7 meeting and cryptocurrancy is really starting to take a front foot in policy makers minds in how to enable the sector to operate at a competitive rate while enabling safe guards to ensure people aren't rug pulled.

It will be interesting to see what the new working group congress has established which is being led by Maxine Waters. The new working group will host a Fintech Task Force as well as a Blockchain Caucus consisting of 12 members of the house of financial services.

Fintech Taskforcr

The chair of the Fintech Task Force will be Stephen Lynch whom held their first hearing on Tuesday 15 June with a primary focus on the future of Central banks and their role in digital currencies. A further subcommittee meeting will be held on 30 June to discuss the need to build resilience of financial systems to combat the effects of climate change. Kind of sounds like a bit of a focus on Bitcoin mining.

You can watch the virtual hearing about the digitalised dollar Here be warned it isn't all smooth sailing with a significant section of the hearing focusing on crimes committed with crypto. It's always an off avenue for attack, whatever you can do with crypto you can do easier and more efficient with fiat. Crypto atleast can be tracked no matter where it goes.

The group was however, in agreement that there is benefits to a government issues CBDC digitalised dollar.

Block Chain Caucus

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There was a bit more clarity in the Blockchain Caucus or more so the seeking of clarity from the IRS. I would agree with the Caucus that the current tax model is not working and not adequately developed for cryptocurrancy.

The Caucus has sought a response from rhe IRS for clarity on tax associated to cryptocurrancy relating to staking, forked assets and what the basic reporting requirements are. You can see a copy of the letter Here

Further issues raised were in relation to charitable donations as currently donating with cryptocurrancy to a registered charity differs to donating with cash and the added complexities involved in cryptocurrancy donations adds barriers. Such as when being taxed on purchases cryptocurrancy is valued at the exchange rate or indices. When donating the same method isn't acknowledged and requires donators to ascertain a written appraisal by a qualified appraiser.

The IRS has also stated it plans to release guidelines on cryptocurrancy to support people in their investments. You can read more about it Here

America playing catchup

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A recent assessment of global policies and positions has led Bill Foster a member of the blockchain Caucus to publicly state that America is constantly playing catch up and states that in order for the US to protect the US dollars status the country needs to prioritise the development of a digital currency. You can read more Here

Opinion

I think the current working groups that have been established are a step in the right direction and there needs to be simplified reporting and tax regulations in order to enable people to adequately report earnings. Quite often tax regulations and requirements can be quite challenging and onerous on people. Yes the argument can be used that one should get a professional or not engage. However, time and time again we see this as a failed stance as people will get involved and then make errors not always on purpose. Furthermore the tax regulations are even a barrier for experienced accountants.

It's great to see some changes coming out and I hope other countries around the world will follow suite like my own as some of the tax regulations I haven't even been able to get clarification on.

Well done to the US, leading once again.

What are your thoughts?

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