Can crypto finally be used as a currency?
It's right there in the name but no one can really use it like that.
The term "cryptocurrency" has been a misnomer basically ever since the technology was invented just over a decade ago.
It's much more like a crypto-asset.
Partly because the price swings are just way to volatile for most people to even want to use or accept it as a currency.
And also because the tax laws in many jurisdictions have made it awfully difficult to do so.
The latter, at least, may see some improvement in the near future.
Finally some good news!
The Virtual Currency Tax Fairness Act of 2020 was introduced to Congress this week.
The intent of the act is to do just what its name implies - to make crypto taxation much more 'fair'.
The idea behind the bill is to make transactions where the capital gain was $200 or less a non taxable event.
Right now, no one can really use bitcoin and other crypto as a currency in the U.S. because they must keep track of a cost basis and then a gain or loss every time they transact in crypto.
Which, as you might have guessed, doesn't make for an easier system than the current one by any stretch of the imagination.
So, while most people out there are saying that crypto hasn't caught on because the transactions are too slow, too expensive, too complicated, too volatile, they have mostly ignored the elephant in the room...
The tax issues basically make using crypto as a currency a non starter in places like the U.S.
Better luck this time around?
This bill was introduced to Congress last year but with a $600 capital gains limit, now they are dropping that limit to $200 and reintroducing it.
More about it can be seen here:
Hopefully the lower threshold can help it gain a little more support this time around.
In my opinion, if this doesn't get changed, it will be a long long time before we ever see bitcoin and or crypto heavily used as a means of commerce.
We need some changes.
Stay informed my friends.
-Doc