A few days after another tightening of the screw from China, the United States Treasury Department announced measures (admittedly much less strict) to better regulate and monitor cryptocurrency markets and exchanges.
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On the proposal of US President Joe Biden, the United States Treasury Department announced Thursday, May 20, 2021 that it wanted to put more measures in place to regulate and monitor cryptocurrency markets and exchanges. Among them, the obligation to report transfers of crytpos to the Internal revenue service (IRS), the federal tax authority of the United States.
Declare any sum with a value of at least $ 10,000
“Cryptocurrencies already pose a significant detection problem by greatly facilitating illegal activity, including tax evasion.”, notes the Treasury Department in its roadmap. According to the latter’s figures, tax evasion as a whole represented a shortfall of $ 600 billion for the US government in 2019. “Although they represent a relatively small portion of business income today, cryptocurrency transactions are expected to gain importance in the next decade.”, anticipates authority.
A new tax regime would thus require the declaration of any cryptocurrency or cryptoasset exchange accounts and payment service accounts that accept cryptocurrency, the document announces. With a view to reducing incentives to “transfer income outside the new information reporting regime”, companies will also have to report any payment or sum received in cryptocurrency with a value of at least $ 10,000.
Creating a digital dollar
The Treasury Department’s tax reform bill presented on May 20 has yet to be approved by Congress. But it comes a few days after a new, much more severe turn of the screw from the Chinese authorities on the use of cryptos in the country. Beijing notably reaffirmed the ban for financial and payment institutions to provide cryptocurrency services, in addition to denouncing the speculative nature of cryptocurrencies.
Recall that China is currently testing a digital yuan with the particular aim of eventually competing with the dollar in international trade. It should be noted that Jerome Powell, Chairman of the Federal Reserve of the United States, also highlighted on Thursday, May 20 the risks associated with cryptocurrencies and announced that discussions for the creation of a digital dollar could take place as early as summer 2021. The European Central Bank has also already carried out a consultation on the creation of a digital euro.
“Recently, cryptocurrency prices have skyrocketed before collapsing, and speculative cryptocurrency trading has surged, severely undermining the security of people’s property and disrupting the normal economic and financial order.”, said the Chinese authorities.
This announcement itself participated in a crash in the value of the majority of cryptocurrencies on Wednesday, May 19. Bitcoin notably lost around 20% of its value in a week, even dropping to around $ 36,500, its lowest level since early February 2021 and its heaviest drop in 24 hours since March 2020. The queen’s price cryptocurrency flirted with $ 65,000 in mid-April 2021.
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