US senators have introduced a bill in the Senate on Tuesday that seeks to eliminate taxes for Americans on small crypto transactions. The bill would exempt residents of America from disclosing any transaction up to $50 and any trade with less than $50 in profits.
Senator Patrick Toomey (R-PA), along with Kyrsten Sinema (D-AZ), put forward the Cryptocurrency Tax Fairness Act outlining the details of the proposal.
“While digital currencies have the potential to become an ordinary part of Americans’ everyday lives, our current tax code stands in the way,”
“[Americans could] use cryptocurrencies more easily as an everyday method of payment by exempting from taxes small personal transactions like buying a cup of coffee.”
Parallelly, similar bills to make low-key transactions tax-free are being worked on by senators Cynthia Lummis (R-Wyo.) and Kirsten Gillibrand (D-N.Y.) in the Responsible Financial Innovation Act, which would exempt people from reporting crypto gains up to $200.
Current laws, as per the IRS’s (Internal Revenue Service) official website states: “When you sell virtual currency, you must recognize any capital gain or loss on the sale, subject to any limitations on the deductibility of capital losses.“
According to industry advocates, this notion prevents crypto from becoming a mainstream alternate payment medium.
“This would foster use of crypto for retail payments, subscription services, and micro transactions,”
said the executive director of crypto research firm Coin Center, Jerry Brito.
“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.”
Once approved, the law might proliferate the use of cryptocurrencies as a mode of payment across the country, with other nations taking a cue. However, there’s a belief that any kind of regulation associated with crypto might not become fruitful until next year.