Biden: Changing the tax on cryptocurrency transactions will increase tax revenue by $24 billion

It is reported that the Wall Street Journal quoted the draft budget for the fiscal year 2024, and that the US President Joe Biden would propose to change the tax on cryptocurrency transactions. Biden predicted that this would increase the tax revenue of the industry by up to $24 billion. The White House spokesman confirmed that the proposed regulations should reduce false transactions. The plan involves loss-making cryptocurrency sales to lock in losses that are not taxable. Then the investor repurchases assets of similar amount again.

Interpretation of this information:

The latest news from the Wall Street Journal asserts that the US President Joe Biden is planning to overhaul the tax structure surrounding cryptocurrencies in the upcoming fiscal year’s budget. This initiative has the potential to bring in additional revenue for the industry, with Biden estimating a potential increase of $24 billion. The proposed shift in tax regulations is expected to curtail false transactions and fraudulent practices.

To accomplish this, the new regulations may include requiring investors to lock in losses on cryptocurrency sales that aren’t subject to taxation. In this scenario, investors will sell their digital assets at a loss, then buy new crpytocurrencies of a similar total worth. This technique will remove loopholes that some individuals have exploited, so they aren’t required to pay certain taxes on their trades.

The move towards implementing new tax structures will likely have an impact on the blockchain and cryptocurrency markets, and industry experts predict there could be mixed reactions. Some regulators see this as a positive move to bring more oversight to a relatively new industry that has been fraught with controversy in terms of lack of transparency and the potential for fraud. Others fear that these new regulations could stifle innovation in the sector, which has already had to fight some negative stigmas in the past due to its volatility and sporadic success.

Nevertheless, this is just an initial proposal, with more details about the regulation expected in the coming months until it is formally included in the 2024 budget. However, in light of the global blockchain and cryptocurrency market reaching a market cap of $2.33 trillion in May 2021, it is not surprising that US regulators wish to gain greater control over this industry’s tax revenue.

In summary, the proposed tax on cryptocurrency transactions by President Joe Biden is expected to curtail false transactions and fraudulent practices and could bring in additional revenue of up to $24 billion. The plan involves loss-making cryptocurrency sales to lock in losses that are not taxable. While the full details of these regulations will be fleshed out in the coming months, the move towards implementing such changes is seen as positive by some regulators who see it as a way to bring more transparency to a relatively new industry that has been fraught with controversy.