Law Decoded: Crypto taxes and taxes on crypto, March 21–28.
It was relatively quiet in the digital asset policy department last week, as regulators and lawmakers in most key jurisdictions retreated to their offices to do the necessary homework. In the U.S., federal agencies got on with the various reports that President Joe Biden’s recent executive orders directed them to produce. Over in the United Kingdom, both the central bank and the Financial Conduct Authority also dropped position papers on crypto-related issues. After thorough deliberation, Thailand’s financial authorities spoke out against using crypto as a means of payment, while rumors of potential legal tender adoption of crypto emerged and died in Honduras.
One theme that has been conspicuous throughout the week is the relationship between digital assets and taxation. Few would argue that cities and even states offering Bitcoin tax payment options to their constituents are doing the Lord’s work that is instrumental in widening the adoption of crypto. On the flip side, digital assets are subject to taxation themselves, a position that does not necessarily advance crypto’s legitimization. Contrary to what one might have thought, India’s approach demonstrated that it is possible to levy heavy taxes on cryptocurrency transactions while maintaining ambiguity around the asset class’s legal status.
As bulky national legislatures and executive agencies take their time to come up with comprehensive crypto policies, city councils in the U.S. and beyond are filling the void. Austin, the capital of Texas, has taken a bullish stance on crypto as it passed two resolutions designed to facilitate blockchain-powered innovation. The word on the street is that the city could soon get its CityCoin, joining the likes of Miami and New York.
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