How These U.S. Senators Plan To Cut Expenses For Daily Crypto Transactions

Submitted by Anonymous (not verified) on Tue, 07/26/2022 - 20:30

U.S.-based crypto think tank Coin Center celebrated the introduction of the Virtual Currency Tax Fairness Act of 2022 in the Senate which is aimed at improving the daily use of crypto assets. Filed by U.S. Senators Pat Toomey and Kyrsten Sinema, this act is a new version of the same name bill filed in the U.S Congress.

Coin Center has been pushing for reducing friction for people using cryptocurrencies in their everyday life. As the organization explained, digital assets transactions create “taxable events”.

This means people need to calculate, report, and pay taxes on crypto transactions. Under the new act filed by Toomey and Sinema, these operations would be free up to a certain threshold and provide people with more tax treatment clarity for Bitcoin and other cryptocurrencies.

The act was specifically created for people looking to spend their crypto in their daily routine, to pay for small services or products. Coin Center wrote the following on the implications of the Virtual Currency Tax Fairness Act reaching law status:

This easy solution to an obvious problem with today’s tax treatment of cryptocurrencies would help level the playing field for this technology (…). This bill is an important piece of our crypto tax agenda in Congress.

As the organization explained, the act proposes that cryptocurrencies receive a similar treatment as foreign currencies. Coin Center claimed this legislation is the first bi-partisan and bi-cameral effort regarding the crypto industry.

In 2017, the think tank helped U.S. Representatives David Schweikert and Jared Polis introduced the Virtual Currency Tax Fairness bill in Congress. Today, the bill has been re-introduced by Schweikert, Tom Emmer, and Suzan DelBene. Coin Center added:

(…). We look forward to continuing to work to support and promote this policy agenda to ensure clarity in the area of crypto of tax treatment.

What’s The Daily Limit For Crypto Transactions To Be Exempted?

The Coin Center press release does not mention the specific limit for crypto transactions to be protected under the act. A separate report from CoinDesk claims the limit will be set at $50 which would be a considerable reduction from the 2017 legislation project.

At that time, U.S. Representatives Schweikert and Polis proposed that any transaction under $600 would be exempt from the capital gains tax regulations. Despite the limit reduction, the act seems poised to face obstacles from U.S. legislators.

Many have been outspoken about their opposition to cryptocurrencies and digital assets. Jerry Brito, executive director of Coin Center, said the following about the newly introduced act:

This would foster use of crypto for retail payments, subscription services, and micro transactions. More importantly, it would foster the development of decentralized blockchain infrastructure generally because networks depend on small transaction fees that today saddle users with compliance friction.

At the time of writing, BTC’s price trades at $20,900 with a 5% loss in the last 24 hours.