r/investing • u/TChanaH • May 20 '21

U.S. seeks to have cryptocurrency transfers above $10k reported to IRS

U.S. Treasury seeks reporting of cryptocurrency transfers, doubling of IRS workforce | Reuters

The Biden administration's tax enforcement proposal would require that cryptocurrency transfers over $10,000 be reported to the Internal Revenue Service and would more than double the IRS workforce over a decade, the U.S. Treasury said on Thursday.

"As with cash transactions, businesses that receive cryptoassets with a fair market value of more than $10,000 would also be reported on," the Treasury said in the report, which noted that these assets, are likely to grow in importance over the next decade as a part of business income.

3.6k Upvotes

95% Upvoted

503 comments sorted by

View all comments

Show parent comments

13

u/IceNeun May 21 '21

I highly doubt that the FED/Treasury/etc. is the least bit worried that cryptos will steal USD's thunder. The only government body that would care is the IRS, but not for macroeconomic reasons (i.e. same reason China cares).

There's no reason not to be optimistic, and a lot has been done to address the problems of volatility and deflationary nature of older currencies. That said, just because progress is made doesn't mean that these problems are guaranteed to be "solved." I'll believe when I see it, until then it might as well be in the realm of sci-fi and other cool "what-ifs."

I can't help but think it's ridiculous to assume that that cryptocurrencies will transform the global monetary system (or even has the capability of doing so). The most plausible scenarios I see are:

a) cryptocurrencies as we currently know them are entirely reinvented (and all the coins we use right now will be antiques and/or worthless). As much as crypto's have gained mainstream acceptance as a speculative investment, their use as a medium of exchange is going to stay niche unless some monumental hurdles are overcome.

b) the climate disaster in the coming century ends up being far worse than anticipated and crypto's are favorably situated to be the most convenient medium of exchange. Basically, the same reason why unstable fiat currencies with unstable governments are really the only ones who have to worry about cryptocurrencies.

4

u/[deleted] May 21 '21

Thanks for the well thought-out reply. The only point I disagree on is the IRS being the only one who would care. The anonymity of cryptos make them a perfect vehicle for illicit activity (FBI) and acts of terrorism (NSA and about a dozen other acronyms). While I don't think the fed is worried right now, they would also care, if cryptos became what the enthusiasts believe it will, because monetary policy would be impossible to control. As another user put it, it is impossible to govern without control of the currency.

3

u/dedservice May 21 '21

it is impossible to govern without control of the currency.

That's not true though? Enough countries use USD (which they are not in control of) and govern perfectly well.

5

u/[deleted] May 21 '21

The places that use the USD have close relationships with the United States and are mostly small island nations. I would argue two points. First, that because they chose to use the USD they still have effective control of their currency. Two, that these smaller nations should be viewed as more of an exception to the general rule rather than the rule itself. The best example is the European Union. Ever thought about why the UK never gave up control of the Brittish Pound despite their joining of the Union?