Professionals in crypto space swear by the prophetic claim that cryptocurrency is going to be the future. They have been unanimous in affirming that it is only a matter of time before cryptocurrency goes mainstream. However, mainstream adoption of this fintech remains a cause of major concern and a headache comments crypto veteran Benjamin Pirus on Forbes. The current crackdown on cryptocurrency by major governments with tightened regulations, tax expectations, etc. make it a very difficult method of everyday payment.
Current regulations do not allow this new kind of payment to thrive and need to undergo a fundamental change for cryptocurrencies to go mainstream suggests the author. Benjamin Pirus is not a tax professional. However, he is a veteran in crypto space and has been writing full time for Crypto Insider, CCN, and Crypto Potato on the news and other related concepts. Also, a part-time crypto trader, Pirus claims that he knows his way around price charts, indicators, hardware wallets, and almost any notable exchange.
The article indicates the need for credit card type payment cards and for crypto holdings rather than a bank account. Small businesses such as grocery stores and malls probably would use such cards, and all crypto-to-fiat conversion is done on the backend by card providers. Although there are such cards like Wirex or Cryptopay, which access cryptocurrency holdings, they are yet to reach the masses due to complicated tax rules, comments the author.
Crypto-crypto transaction would not attract any kind of tax. However, crypto to fiat transaction is a taxable event. Hence, taxation would occur on whatever gain or loss was incurred when the crypto asset was sold for fiat. Law groups assert that though crypto-to-crypto trades technically qualifies as an investment like-kind exchanges, but such qualification is uncertain. It may sound simple but tracking and recording these events is difficult. Most basic examples cited are hugely complicated with the person ending up paying more in taxes for simple purchases. With different wallets, where one can save their cryptos that require additional fees, cost of paying an accountant, etc., overall process becomes so convoluted that daily cryptocurrency payment would probably put users at risk for audits.
The author suggests that bringing tax exemptions for crypto-to-crypto trades will do away with such complications. He says that every transaction is recorded on an online public ledger and it is possible to develop the necessary tools to make this process easy. Presently, the world is not ready for daily crypto payments, Pirus concludes.