In a recent uptick for digital currencies, US Democratic presidential hopeful Robert F. Kennedy Jr. has promised cryptocurrency enthusiasts a respite from capital gains tax once digital currencies are converged to the US Dollar. At a recent Heal-the-Divide PAC event, where he reiterated his pro-crypto outlook, Kennedy lauded the benefits such a move would bring. Fostering innovation, incentivizing investment, safeguarding citizens’ privacy, and encouraging crypto businesses to grow domestically as opposed to jurisdictions like Singapore, Switzerland, Germany, and Portugal, were among the manifold advantages highlighted.
As things stand, the Internal Revenue Service (IRS) considers cryptos as property or investments, not currency, laying them open to capital gains tax. This, along with the Securities and Exchange Commission’s (SEC) harsh scrutiny of the crypto industry, have been lamented for long by crypto stakeholders. The increasing demand for regulatory transparency from crypto firms is predicated on their belief that a favourable outcome in Ripple‘s case against the SEC could potentially soften the agency’s stance on the industry.
In a clear indication of his administration’s attitude toward digital currencies, Kennedy’s rebuttal of incumbent President Joe Biden‘s proposed 30% tax on crypto mining was made public through a tweet in May. Tagging it as a message of deterrence for the crypto industry, Kennedy cautioned against pushing budding innovation off US shores.
As it looks, Kennedy’s position creates a tussle between two crucial aspects. On one side is the allure of a digital ecosystem – fertile with invention, promising privacy, and brimming with growth opportunities. On the other, the reality that light-touch regulation could open up a Pandora’s Box of risk such as financial destabilization, investor victimization, and abuse of these platforms for illegal activities.
As the US gears up for the big presidential election next year, the crypto community keenly seeks assurance for their ever-evolving field. Can a healthy compromise between fostering innovation and ensuring investor protection and system stability be found? The forthcoming elections may well have a significant role in answering this, impacting the direction of U.S. crypto policy for the next few years.
Source: Coindesk
