Potential Game Changer for Adoption of Crypto

The news of a breakthrough law in the United States Congress had slipped my radar given the focus on other issues these days. However, after reading the details closely, the proposal to exempt from taxation cryptocurrency transactions under $200 is huge for the potential of adoption. Given the current stance of the IRS to tax any type of conversion given the definition of cryptocurrency being deemed property has always been a challenge for encouraging growth of crypto use for commerce. That has always been unfortunate as it is a limitation from growth and innovation in the payments space given the challenges it brings to administering.

In fact, the reasoning behind the proposal in Congress is to make it easier to use cryptocurrencies and open the asset class for more use and adoption, in addition to bringing more innovation. The risk has always been that the United States could lose out to other countries willing to be more flexible in the adoption and growth of the asset class. Taxes has always been one of the key items that has limited adoption given the uncertainty to the business community and potential institutional investors.

Recognizing that allowing the asset class to develop would be a large step for the United States as it has always been a guide for all innovative asset classes. Given the lack of clarity with most of the rules and regulations in place with traditional assets, more clarity will be surely welcomed by all stakeholders trying to develop the asset class. Allowing these changes will also bring opportunities to new business and developers to assist small businesses which always struggle with payments and banking due to some inefficiencies and costs that exists in the current structures.

The administrative burden of accounting for transactions has been a personal challenge for me and surely curtails the amount of transactions I do. Keeping up with conversions and transactions for tax purposes adds an additional layer of complexity and risk to individuals which makes adoption difficult. For example, buying Splinterlands cards have been challenging as it shifts the tax basis from Steem/SBD to NFTs. Not sure how it will even be if I ever sell any of the cards in the future. However, if this law or rule passes, I will surely become more active and will actually finally actively search for a crypto-based debit card for daily use as it will be the ultimate way to adopt cryptocurrencies in my daily life.