US lawmakers launched the Cryptocurrency Tax Fairness Act on Monday to accelerate the widespread adoption of cryptocurrencies. The law aims to legitimize digital currency as a form of payment. This move could also influence neighboring countries to adopt emerging technologies and ultimately help digital assets perform well globally. India is one of the very countries that can inspire others regarding the legitimacy of digital assets.
Rep. David Schweikert and Suzan DelBene introduced the bill, and Tom Emmer supported it along with Rep. Dareen Soto. The law created in the US allows for a proper tax structure instead of applying flat rates to cryptocurrency earnings like India does. With it, investors can easily use cryptocurrencies in various ways.
The new law is more comprehensive than the current cryptocurrency laws in the US. For example, the cryptocurrency rules applied require investors to report minimum capital gains on cryptocurrency transactions, such as in India. In other words, users will need to keep track of their earnings even when paying for a coffee or pizza order in one transaction. Keeping track of microtransactions is impractical and makes using cryptocurrency frustrating.
Therefore, to make virtual assets user-friendly and increase their adoption, the Crypto Tax Fairness Act is introduced.
Bitcoin’s market cap skyrocketed to $786 billion. Source: Tradingview.com
New Law Exempts Cryptocurrency Tax on Winnings Less Than $200
Introducing the new law, the legislators revealed that the most important disadvantage of strict rules is that it slows down the growth of our digital economy and inhibits the use of cryptocurrencies, stating;
"The Virtual Currency Tax Fairness Act would exempt personal transactions made with virtual currency when earnings are $200 or less."
The new law exempts cryptocurrency transactions with profits below $200. This means that crypto users will get rid of microtransaction tracking along with tax savings on such transfers. The bill paved the way for the widespread adoption of blockchain as it was difficult to track thousands of transactions in a year. An official, Jerry Brito, expressed that the concept behind the development of the law is to treat digital currency as foreign currency.