Cryptocurrencies aren’t money: G20
buenos aires — Finance ministers seeking to crack down on tax evasion this week in Buenos Aires have cryptocurrencies like Bitcoin at the forefront of their minds.
The Group of 20 countries are moving to a consensus that cryptocurrencies aren’t money after all, but an asset. That means trades potentially could be subject to capital gains tax.
Cryptos “lack the traits of sovereign currencies,” according to a draft G20 communique obtained by Bloomberg. The G20 ministers are scheduled to discuss the issue in full on Tuesday afternoon.
“Whether you call it crypto assets, crypto tokens — definitely not cryptocurrencies — let that be clear a message as far as I’m concerned,” said Klaas Knot, president of De Nederlandsche Bank NV, who also chairs the Financial Stability Board’s standard committee on the assessment of vulnerabilities. “I don’t think any of these cryptos satisfy the three roles money plays in an economy.”
It’s already proving an issue in the US, where only a tiny fraction of Americans are reporting their crypto deals to the Internal Revenue Service, according to Credit Karma. Less than 100 of the first 250,000 federal tax returns filed as of February 2018 included a declaration related to crypto gains and losses, it found.
While few officials at the G20 were talking about cryptos six months ago, it’s been hard to escape this year, after one of the wildest investment manias in history that’s led to worries about money laundering, cyberthefts, excessive speculation and more. The Financial Stability Board, which is chaired by Bank of England Governor Mark Carney, warned Sunday the rapid growth of cryptocoins such as Bitcoin may one day make them a threat to the financial system. — Bloomberg