Two Congressmen in the U.S. House of Representatives—Colorado Democrat Jared Polis and Arizona Republican David Schweikert—have introduced The Cryptocurrency Tax Fairness Act of 2017, a bipartisan bill aimed at treating and regulating cryptocurrencies in the U.S. as exactly that—currencies.
As the chairmen of the Congressional Blockchain Caucus, Rep. Polis and Rep. Schweikert are legislatively attacking the main tax impediment that U.S. crypto users currently face: their Internal Revenue Service’s categorization of crypto as “property.”
Indeed, hitherto the IRS has legally categorized Bitcoin and other cryptocurrencies as property, not currency.
This property dynamic makes capital gains regulations apply to crypto expenditures made in the United States. So, in the current regulatory framework, U.S. crypto spenders have to pay a sales tax for a purchase on top of a short-term or long-term capital gains tax. Not very user-friendly.
Rep. Polis and Schweikert’s bill would change this major tax headache for good by giving U.S. crypto users an exemption that would “exempt transactions under [$600] from triggering a taxable gain.”
In this sense, the law and would be an official governmental step toward treating cryptocurrencies as legitimate currencies in the U.S.A.
— BitTrail (@RoccoDallas) October 13, 2017
And beyond America, this bill has implications for the crypto space as a whole. While not every nation across the globe classifies Bitcoin as “property,” many, like America and the U.K., do.
In being a major world leader, America’s regulatory approach to crypto will influence countless other nations’ approaches.
In extension, then, Rep. Polis’ and Schweikert’s bill could end up being one of the beginning catalysts for an international regulatory shift toward categorizing cryptocurrencies as currency, not property.
Such a shift would have huge implications for the space, paving the way for mainstream adoption and powerful, sustained, and increasingly exponential upward pressure on the prices of top crypto currencies.
TLDR: U.S. crypto users may soon have a tax exemption that will make spending crypto more user-friendly than ever. This could bring millions of new American buyers into the space.