- A new bill has been put forward to US Congress which proposes that crypto-to-crypto transactions be tax-free
- The bill also asks that crypto be excluded from the definition of a security
- Should it pass, the bill would be a tremendously welcome for crypto enthusiasts
It is impossible to deny the fact that the future of crypto in the larger world is dependent in large part on what laws are passed by the government regarding its treatment. For example, Bitcoin saw a huge boost when it was legalized as a form of tax payment in Ohio but saw a decline when it was banned in China. This is why many pro-crypto individuals and firms both in and out of government actively campaign to have pro-crypto laws passed to give the industry a boost. Such was the case when the Token Taxonomy Act was introduced to Congress in the US.
The Token Taxonomy Act
The Token Taxonomy Act is, essentially, an act that seeks to make amendments to two existing laws which are the Securities Act of 1933 and the Securities Exchange Act of 1934. The amendment in question is to have digital assets excluded from the definition of a security.
The question of whether crypto qualifies as a security is one that has been discussed for years and has yet to get a concrete answer. Should this bill be passed, all the speculation can be finally put to an end.
The bill also calls on the Securities and Exchange Commission to make certain regulatory provisions for crypto, which is fitting considering the fact that the SEC has a long-standing relationship with the crypto community that has been both progressive and tumultuous.
Then, there is the issue of tax as the law would ask for a number of tax exemptions for crypto such as virtual currencies held in individual retirement accounts and also for crypto-to-crypto exchange transactions. There is also a proposed de minimis exemption from taxation for gains on crypto sales that were not for cash or cash equivalents.
Investor protections would be kept
The bill does state that government arms such as state governments and other subdivision retain their jurisdiction to prosecute and investigate any unlawful or fraudulent actions that are taken with any connection to cryptocurrency.
This bill, should it pass, would be a historic one and will go a long way towards benefiting the industry through the various tax exemptions and the regulatory provisions that would be enjoyed as well.