Bitcoin and ethereum, the two largest cryptocurrencies have suddenly surged higher this week, with prices leaping following a much stronger than expected U.S. jobs report.
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The bitcoin price, which has fallen sharply from a peak of almost $70,000 per bitcoin late last year, has bounced from a low of $32,000 in January, surging back above $40,000. The ethereum price has also jumped, rising 20% over the last week.
Now, a bipartisan group of U.S. House representatives has reintroduced a bill that would exempt people from paying taxes on bitcoin and crypto payments under $200, called “an important step forward” by one congressman.
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The “Virtual Currency Tax Fairness Act” – an amendment to the Internal Revenue Service’s tax code … [+]
“Virtual currency is reshaping our everyday lives, and the United States needs to recognize this and work to treat these currencies fairly in our tax code,” congressman David Schweikert (R-Ariz.) said in a statement. “This legislation is an important step forward, and it lays the groundwork for growing the digital economy.”
Designed to simplify tax burdens on daily crypto users who must now report even the smallest capital gains, the Virtual Currency Tax Fairness Act—an amendment to the Internal Revenue Service’s tax code—was announced this week by crypto-friendly representatives Schweikert, Suzan DelBene (D-Wash.), Darren Soto (D-Fla.) and Tom Emmer (R-Minn.) and would retroactively apply to all qualifying transactions from December 31, 2021 if the legislation becomes law.
Emmer, Schweikert and Soto are co-chairs of the Congressional Blockchain Caucus, a congressional group that now counts 35 lawmakers as members.
“Not only will this create a level playing field for digital currencies, it will also help unleash innovation on applications like micropayments, which can consist of dozens of transactions per minute and thus are difficult to square with the current law,” said Jerry Brito, executive director of cryptocurrency think tank Coin Center, who has lobbied for the bill.
Currently, bitcoin and crypto users must report changes in a cryptocurrency’s value in dollars from when they purchased the crypto to when it was used in a transaction, including small retail purchases.
“While bitcoin and other cryptocurrencies are technologically innovative payment methods, today you have to keep track of and report every transaction you make using them, whether it’s a $10,000 investment trade or whether you’re buying a 99¢ song online or a latte at a café,” added Brito. “This obviously creates friction and puts cryptocurrencies at a disadvantage relative to other digital payment methods.”
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The bitcoin price has surged 10% over the last week after a period of stagnation for bitcoin, … [+]
Bitcoin and many other cryptocurrencies have developed a reputation as speculative investments over recent years as prices have rocketed higher, with few companies accepting bitcoin as a payment method.
The bitcoin price has surged 300% over the last two years with the ethereum price climbing at an even faster pace as demand for blockchain-based decentralized finance (DeFi) and collectible non-fungible tokens (NFTs) has exploded.
Technological developments such as the second layer bitcoin lightning network, allowing faster and cheaper bitcoin payments, and Tesla billionaire Elon Musk’s backing of the meme-based bitcoin rival dogecoin have strengthened crypto’s payment use-case. Last month, Tesla began allowing people to buy branded merchandise using dogecoin.
“As the use of virtual currencies for retail payments increases, it’s important that Americans are able to easily understand their tax obligations,” said Kristin Smith, executive director of the Blockchain Association. “By providing an exemption for small everyday purchases, the Virtual Currency Tax Fairness Act would ease this burden for consumers.”
Source: https://www.forbes.com/sites/billybambrough/2022/02/05/congress-introduces-a-radical-crypto-bill-to-unleash-innovation-as-the-price-of-bitcoin-and-ethereum-suddenly-soar/