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Legislation Threatens to Kill the Virtual Currency

Legislation Threatens to Kill the Virtual Currency

There is every chance that bitcoin can grow stronger as a virtual currency as long as US legislation doesn’t kill it off. As the currency uses decentralized cryptography it removes the need for banking middlemen which in turn reduces transaction costs. This has many benefits such as offering a way out for poor nations which are trying to get ahead in the financial sector.

However, due to the actions of a few, the virtual currency is gaining a bad reputation. As a result lawmakers in Washington could impose regulatory restrictions on the currency which would slow its progress.

For example, the IRS recently ruled that bitcoins are “property” that taxpayers own. This means that it is obligatory to report on all capital gains.

As Andreas Antonopoulos, one of the heads of the bitcoin community, said, “Reporting capital gains is ridiculous and it’s going to cause a mountain of paperwork.”

On the other hand, FinCEN (the US Treasury Financial Crimes Enforcement Network) defines bitcoin as an active currency. While it is not legal tender, the agency sees exchanges as money transmitters.

This contradiction in the US will inevitably slow down the growth of the virtual currency industry and possibly even kill it off entirely which would be a great shame considering the potential it has already shown.

OCA News Editor