Cryptocurrency is a growing medium of finance, but according to many analysts, the lagging tax regulations is a serious problem for the arena worldwide, and they are convinced that so long as regulations continue to lag, the crypto space will never reach mainstream or legitimate status.
Regulations May Not Be as Important as We Thought
For years, people have been talking about the lack of regulation and clarification regarding tax data for cryptocurrencies. What constitutes a transaction? What doesn’t? Does one have to pay additional fees when they transfer money to a separate exchange? These and other questions continue to meander throughout the crypto space, and to this day, very few people offer answers to these questions.
In fact, many political candidates have made cryptocurrency regulation a primary staple of their campaigns. Both 2019 and 2020 saw presidential candidates, for example, that sought to make crypto regulations clearer and more understandable if they were to take the White House this coming November. Andrew Yang, for example, is a businessman who ran as a member of the Democrat party. He sought to ensure traders knew what they were doing when they entered the crypto space.
He said that he would clarify all crypto regulations and make it so that they were in plain English, giving everyone a chance to get involved without issue. However, Yang failed to make a serious impression on voters, and was ultimately forced to suspend his campaign early in the political game.
Following the demise of Yang’s dream of being commander in chief, Michael Bloomberg – a publishing mogul and the former mayor of New York City – stepped into the political limelight and offered the same thing as Yang. He swore that he would make crypto regulations much easier to understand. Again, voters did not see Bloomberg as the candidate worthy of serving as the leader of the free world, and his campaign lasted even less time than Yang’s did.
Perhaps people should take this as a sign that crypto tax regulation is not a big deal in the eyes of the standard public. Most people are not as involved in crypto as one might assume, nor do they wish to be. Perhaps many current traders and investors are satisfied with the way things are and prefer to leave the space as it is.
People Are Split Down the Middle
But others disagree, insisting that appropriate tax guidance is an essential building block of the growing crypto world. Henri Arslanian – the PwC global crypto leader – thinks so, explaining in an interview that many are working towards the common goal of ensuring crypto is properly monitored. He says:
While there is currently a lack of guidance, the situation is moving quickly. Tax authorities and policy makers are still learning about how much of the industry works. We expect the rate of change in the tax landscape to be as fast as it is for the crypto industry over the coming years.