After many years of confusing statements and conflicting guidance, the Internal Revenue Service (IRS) has finally taken more concrete steps to provide clarity on their treatment of cryptocurrency.
In a matter of weeks, the IRS will update its guidance on cryptocurrencies for the first time since 2014. Congress is also considering the passage of three pieces of legislation that would go a long way in modernizing securities laws and give those operating in the crypto universe a much greater degree of certainty.
Up until this point, many people in crypto (myself included) were growing increasingly frustrated with the US government’s inaction on the subject of blockchain and cryptocurrencies.
However, as time went on, it became more and more apparent to government officials that distributed-ledger technology and cryptocurrencies are not only here to stay, but they will become an increasingly important part of our world, not just in the US.
Representative Tom Emmer has been one of the leading voices for crypto-friendly regulation in the US, stating, “The concern I have is really about driving innovation out of the country.” This has led to bills such as the Token Taxonomy Act and the Blockchain Regulatory Certainty Act making their way through Congress.
Prior to this, critical innovation and creativity were being stalled and killed by regulators who refused to embrace this new technology and its novel features. This suppression of innovation hurt the industry in the short-run and dampened Americans’ interest in the space but will prove to be no more than a speed bump in the long-term.
Politicians eventually realized the cost of ignoring this groundbreaking technology was simply too much. The fact that lawmakers are finally beginning to debate and construct legislation for blockchain technology represents incredible validation for the entire industry.
Indeed, working with regulators and helping them understand this technology is key to the industry’s success, but the space also needs clarity from the government. As Representative Warren Davidson said, “It’s ultimately Congress’s job to pass the laws and provide certainty.”
We’re finally seeing the first steps toward new laws and legal frameworks being devised for this new blockchain-enabled world. Now crypto is in a prime position to flourish and continue to upend countless traditional sectors.
Industries such as healthcare, shipping logistics, and supply chain management are among the many integral US industries blockchain has the potential to disrupt. However, as time goes on, my guess is almost every industry will feel the effects of distributed ledger technologies.
All aboard the crypto train!