We have already discussed the legal details of Bitcoin. Recently Coino.biz started a series of articles on the Regulators’ Opinions on the issue of Bitcoin legality in the USA.
It is worth talking about the issue of Bictoin legality in the USA, because many countries follow the example of this country. The USA is often considered to be an opinion-maker in the field of cryptocurrencies and blockchain. The world Bitcoin community is actively following the regulations and restrictions that are introduced in the USA.
You can read our article Is Bitcoin legal? right now!
Internal Revenue Service (IRS)
“Virtual currency that has an equivalent value in real currency, or that acts as a substitute for real currency, is referred to as “convertible” virtual currency. Bitcoin is one example of a convertible virtual currency. Bitcoin can be digitally traded between users and can be purchased for, or exchanged into, U.S. dollars, Euros, and other real or virtual currencies. For federal tax purposes, virtual currency is treated as property. General tax principles applicable to property transactions apply to transactions using virtual currency”.
Less than 1% of the US citizensincluded Bitcoin (or other cryptocurrencies) in their tax statements last year (2017). However, you always need to make sure that you comply with the law. You can also read more about the IRS regulations in a taskforce:
“It’s possible to use Bitcoin and other cryptocurrencies in the same fashion as foreign bank accounts to facilitate tax evasion.”
There are also rumors that Bitcoin users will fall under the tax amnesty in the near future. However, the representatives of the IRS never commented on this issue.
The US Federal Reserve Bank is probably one of the most authoritative banking agencies in the world, because it manages the US dollar (USD). The US Federal Reserve has already published a number of statements both on Blockchain, the underlying technology of Bitcoin and Bitcoin itself. The agency is actively researching the issues of cryptocurrency regulation, blockchain technology, ICOs, etc. Without a doubt, Bitcoin is becoming more and more popular all around the world. The fact that the Federal Reserve is interested in the cryptocurrency industry signifies that Bitcoin will soon become even more influential. At the same time, the US Federal Reserve has also released warnings regarding the Bitcoin risks. Not a long time ago Janet Yellen claimed:
“It is a very important new technology that could have implications for the way in which transactions are handled throughout the financial system. We are looking at it in terms of its promise in some of the technologies that we use ourselves and many financial institutions are looking at it. It could make a big difference to the way in which transactions are cleared and settled in the global economy.”
Thus, we can assume that Bitcoin and other cryptocurrencies are taken seriously by the world’s most influential agency. Moreover, the Federal Reserve might also introduce its own cryptocurrency in the near future. In case it is true, the USA will join the cryptocurrency community and introduce the US national digital currency, which will definitely affect the world.
Financial Industry Regulatory Authority (FINRA)
The Financial Industry Regulatory Authority has always been interested in the in-depth research of Bitcoin, the blockchain technology and the cryptocurrency industry. In 2015 FINRA has defined Bitcoin:
“Bitcoin is a peer-to-peer payment system that uses its own currency, called bitcoin, to transact business. Bitcoins are not issued by banks or governments—indeed the Bitcoin platform was designed to offer an alternative to national currencies like the dollar, and commodity-based currencies such as gold or silver coins.”
The agency has also issued guidelines and warnings regarding Bitcoin. One of them is called Bitcoin Basics—9 Things You Should Know About the Digital Currency. It tells about money, digital currencies, risks connected to Bitcoin, etc. FINRA has also stated in its reports that blockcain can change the way the business is orgalised in the USA.
“Distributed Ledger Technology (DLT) (also known as blockchain technology or distributed database technology) has attracted significant interest and funding in the financial services industry in recent years. Several large financial institutions have established dedicated teams to explore the technology, and some market participants have formed consortia to create industry standards”.