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"Our existing tax law stands in the way of digital currencies being a commonplace part of Americans' everyday life," added Toomey.

Senators from the US introduce a bill that would remove taxes paid on small Cryptocurrency transactions

A bill that would exempt Americans from reporting cryptocurrency transactions of less than $50, or trades in which they make less than $50, has been proposed by U.S. senators Patrick Toomey (R-PA) and Kyrsten Sinema (D-AZ), according to a release dated Tuesday.

The bipartisan Virtual Currency Tax Fairness Act follows the introduction of comparable legislation by senators Cynthia Lummis (R-WY) and Kirsten Gillibrand earlier in 2022. (D-NY).

"Our existing tax law stands in the way of digital currencies being a commonplace part of Americans' everyday life," added Toomey.

The Internal Revenue Service (IRS) still continues to adhere to its stance that any cryptocurrency transactions may be subject to capital gains tax. According to the agency's website, "When you sell virtual money, you must record any capital gain or loss on the sale, subject to any limitations on the deductibility of capital losses." The broad usage of digital tokens as a form of payment, according to crypto proponents, is restricted in part by that regulation as well as other elements like price volatility.

According to Jerry Brito, executive director of Coin Center, "Cryptocurrency requires the same exemption for modest, personal transactions as we have for foreign currency." This would encourage the use of cryptocurrency for small-scale transactions, subscription services, and retail payments. More importantly, it would encourage the growth of decentralized blockchain infrastructure in general because networks currently burden users with compliance friction caused by minor transaction fees, which undoubtedly costs the economy more than the otherwise earned tax money.

As of just before 3:00 p.m. ET, ethereum (ETH-USD) is down 9.3 percent to $1.36K and bitcoin (BTC-USD) is down 4.5 percent to $20.83K over the past 24 hours, according to a scan of the cryptosphere.

Bipartisan stablecoin legislation was reportedly postponed by House lawmakers earlier this week (July 25) until September.

Written By

Petrache Ionut

Aug 6, 2022