A proposal has been made by one of one of the US Representatives to introduce a 5-year moratorium period on digital currency regulation in the US. As per the bill submitted by to the Congress, any statutory restrictions or regulations on digital currency should be hold off for five years starting 15th June 2015 in order to use the above period to fully access and examine the potential economic benefits of digital currencies. The draft law also suggests to classify digital currencies as traditional currencies in the meaning of the US tax regulations. This is opposed to the current position of IRS who, as per their recent guidance, see and tax bitcoin holding as a type of a property. In this regard, the bill explicitly criticises the current property-focused tax approach arguing that it fails to take into account the multifaceted characteristics of cryptocurrency.

The above bill is a push for the shift in the tax treatment. If the above bill passed, IRS would be required to revisit and rework its current regulatory and tax framework for digital currencies.

We are monitoring the above developments in the US and will publish any updates available in this regard.