Businesses that receive crypto-assets worth more than $10,000 would need to report them to the IRS, the Treasury Department said in a report on Thursday outlining tax compliance proposals. The price of Bitcoin and other cryptocurrencies wobbled.
The move would mark the latest regulation on cryptocurrencies and potentially other digital assets. Their values soared last year but have plummeted in recent days.
The details were included in a report from the Treasury Department outlining tax compliance measures that are part of President Biden’s proposals in the American Families Plan. It intends to increase access to education and tax support and other forms of support to families.
The tax proposals would “increase fairness in the tax system and foster a tax system where Americans pay the taxes they owe.”
The Treasury Department, in the report, said virtual currencies are a “significant concern” for the government.
“Cryptocurrency already poses a significant detection problem by facilitating illegal activity broadly including tax evasion,” the report said.
“Despite constituting a relatively small portion of business income today, cryptocurrency transactions are likely to rise in importance in the next decade, especially in the presence of a broad-based financial account reporting regime,” it added.
The Treasury Department did not immediately respond to a request for more information.
Meanwhile, the Federal Reserve said Thursday that it will publish a research paper this summer that explores the development of its own central bank digital currency (CBDC).
“Technological advances also offer new possibilities to central banks — including the Fed,” Chairman Jerome Powell said. “While various structures and technologies might be used, a CBDC could be designed for use by the general public.”
The price of Bitcoin fell 2.8% to $40,428, according to cryptocurrency exchange Coinbase (COIN), after rising then falling earlier. Ethereum also reversed up again, rising 4.4%, and XRP added 2%.
Coinbase stock rose 3.8% on the stock market today after plummeting for most of the week. Among other Bitcoin stocks, Marathon Digital Holdings (MARA) edged up 0.8%, Riot Blockchain (RIOT) added 0.2%, Grayscale Bitcoin (GBTC) rose 1.4%, and Silvergate Capital (SI) rallied 6.9%.
Risks Weigh On Price Of Bitcoin
The price of Bitcoin fell hard this week after China expanded its crackdown on cryptocurrencies.
Chinese regulators have tightened restrictions that ban financial institutions and payment companies from providing cryptocurrency services, according to a Reuters report.
Last week, he said the electric-vehicle maker had suspended vehicle purchases using Bitcoin, citing energy-use concerns. But he has said he “strongly” believes in crypto, and that Tesla would not be selling any Bitcoin.
However, Tesla said last month that it had sold a portion of its Bitcoin holdings for a $101 million profit. Earlier in the year, the company said it had invested $1.5 billion in Bitcoin.
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