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Tuesday, October 17, 2023

Biden crypto executive order tipped to tighten rules on Bitcoin & others

Signs of an impending crackdown on cryptocurrency by the US government continue to grow, with reports suggesting a new Biden executive order could intensify the White House’s approach to non-traditional finance. The news follows earlier commitments by President Biden to bring together 30 countries around the world in an attempt to tackle “cyber threats,” including potential misuses of crypto.

In a statement ↗ on Cybersecurity Awareness Month, Biden highlighted possible issues like attacks against critical infrastructure and ransomware as key points of concern. “This month, the United States will bring together 30 countries to accelerate our cooperation in combatting cybercrime,” the President said, “improving law enforcement collaboration, stemming the illicit use of cryptocurrency, and engaging on these issues diplomatically.”

Meanwhile, in a report today, the President is said to be considering cranking up the response to increasing crypto use at home, too. A new executive order is said to be in the works, that would instruct “federal agencies to study and offer recommendations on relevant areas of crypto,” Bloomberg ↗ says based on sources familiar with the proposal.

That would include financial regulation, national security, and economic innovation, it’s said. The order has not been finalized yet, and details could well change before any announcement is made.

Still, it’s unsurprising that the government should be paying such attention to crypto right now. Attitudes toward alternative currencies around the world have varied considerably, from outright suspicion and bans on crypto mining in China, through to countries like El Salvador adding bitcoin as a parallel legal tender. In El Salvador, though the US dollar remains in use, bitcoin will be accepted alongside it. The country plans – controversially ↗ – to mine coins using energy from volcanic sources.

In Europe, meanwhile, the European Central Bank confirmed earlier this year that it was exploring the possibility of a “digital euro ↗” currency of its own. The cross-border virtual coin would be based on a direct claim on the central bank itself, the ECB pointed out, in an attempt to reassure users that the bottom wouldn’t unexpectedly drop out of the market.

For the US, alongside the potential for crypto like bitcoin, ethereum, and more unusual coins such as doge to be used in illegal ways, another angle of interest has been ensuring that those trading in, or using, cryptocurrency aren’t doing so to avoid tax liabilities. In 2020, the US Treasury proposed new rules about crypto transactions, which would mean transfers to the equivalent of $10,000 ↗ or more would need to be reported to the IRS.

“Cryptocurrency already poses a significant detection problem by facilitating illegal activity broadly including tax evasion,” the Treasury suggested at the time. It followed a reminder by the IRS in 2019 that gains in coins such as bitcoin would indeed count as income, and should be reported ↗ on an individual or company’s tax return.

BFIA Admin
BFIA Admin
The big boss.

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