U.S. regulators uncovered their future plan to address the rise of cryptocurrency for the upcoming year, with focus directed at the “greater clarity” concerning the legality of decentralized transactions, reported by Bloomberg.
The Federal Reserve, the Federal Deposit Insurance Corporation (FDIC), and Office of the Comptroller of the Currency (OCC) unveiled their future scheme to address the uprise of cryptocurrency, placing the digital asset with utmost priority for 2022.
The plan could potentially focus on stablecoin issuance via loan collateral and the manifestation of cryptocurrency on enterprise balance sheets. The three federal entities aim to examine the needed means to employ bank capital and liquidity standards to U.S.-based banking organizations.
The shared roadmap has yet to be finalized, given that the agencies are looking into different issues to accommodate the market’s changes. It will adhere to crypto policy “sprints” to assist in structuring regulatory priorities for the upcoming year.
The OCC, the Reserve, and the FDIC’s goals are to determine any potential threats and establish the efficacy of current rules. While there is no certainty that the roadmap will create fundamental changes, however, one thing is certain though, it will not work in favor of holders of decentralized assets.
The American regulatory move on cryptocurrency will proceed with caution, with crypto users having to proceed with cautions and hold back on specific activities to adhere to the word of law.
Coinbase adds tax center to platforms to report crypto taxes
Famous cryptocurrency exchange, Coinbase, uncovered plans to add its latest tax center on its platforms to assist U.S.-based customers in figuring out how much taxes they owe the IRS from their cryptocurrency transactions.
When tax day comes, the section will assemble every transaction made and put them all together into one space to facilitate their taxes.
While we might consider some of the leading cryptocurrencies on the market, such as Bitcoin and Ethereum, with the same monetary value as fiat money, the Internal Revenue Service (IRS) considers these decentralized assets as property with monetary value according to the federal agency’s FAQ.
Meaning, to the IRS, any type of cryptocurrency transaction will be considered as capital gains and losses and will be reported as such. In parallel, this also means keeping a record of the asset’s value when bought and sold throughout time.
Coinbase perceives that its new section will reveal “a personalized summary of [a customer’s] taxable activity on Coinbase, broken out over time by realized gains/losses and miscellaneous income.”
Then, this data can be shared with an accountant specializing in cryptocurrency and taxes or can even be implemented into tax software, such as TurboTax. Coinbase also accentuated that in case users were transferring crypto to external exchanges, wallets, or other decentralized finance (DeFi) services, users will also be able to receive tax reports covering an estimate of 3,000 transactions with CoinTracker, for free.
Customers can access the cryptocurrency exchange’s tax section from their account’s profile icon at the top right-hand corner of the interface. Once the “Taxes” shows on the menu item, users can access it and receive reports.
As for the application, users can access the Taxes section from the “Profile & Settings” menu – accessed from the top left of the application’s interface. Moreover, Coinbase is in the works to deliver written guidelines and assistance videos in the upcoming weeks to elaborate on how cryptocurrency and digital assets taxes works.
Swiss National Bank against issuing retail central bank digital currency
The Swiss National Bank does not see any overall benefit from issuing a central bank digital currency (CBDC) to be used by the general public and used in day to day transactions, governing board member Andrea Maechler said on Tuesday.
“We believe the risks outweigh the benefits,” Maechler told a financial conference held in Frankfurt, saying a retail CBDC meant central banks taking on the risks carried by the private sector and increased the risk of bank runs.
There also needed to be a balance struck between safeguarding privacy and the potential misuse of retail CBDCs in criminal activity, Maechler said.
Financial inclusion was also not a sufficient argument for CBDCs in Switzerland, Maechler said, with almost 100% of the country’s working population having access to bank accounts, while cash was still widely used.
“This does not mean the SNB is not interested in CBDC, but our focus is to look at the role that wholesale CBDCs could play,” Maechler said, referring to their use in transactions between financial institutions like banks.
The SNB last week said it has successfully used digital currency to settle transactions involving five commercial banks, and has also looked into how the technology can be used to improve cross-border payments..
Still, Maechler remained cautious.
“None of these projects are an indication that the SNB is ready to issue a wholesale CBDC,” she said.
Singapore bank issues guidelines to discourage crypto trading by public
The Monetary Authority of Singapore (MAS) on Monday issued guidelines that limit cryptocurrency trading service providers from promoting their services to the general public, as part of a bid to shield retail investors from potential risks.
Singapore is a popular location for cryptocurrency companies due to a comparatively clear regulatory and operating environment and is among the forerunners globally in developing a formal licensing framework.
But the city-state’s authorities have repeatedly warned that trading in digital payment tokens (DPT), or cryptocurrency, is highly risky and not suitable for the general public, as they are subject to sharp speculative swings.
The new guidelines clarify the expectations of MAS that companies should not engage in marketing or advertising of DPT services in public areas in Singapore or through the engagement of third parties, such as social media influencers, to promote DPT services to the general public.
They can only market or advertise on their own corporate websites, mobile applications or official social media accounts.
“MAS strongly encourages the development of blockchain technology and innovative application of crypto tokens in value-adding use cases,” Loo Siew Yee, MAS Assistant Managing Director (Policy, Payments and Financial Crime), said in a statement.
“But the trading of cryptocurrencies is highly risky and not suitable for the general public. DPT service providers should therefore not portray the trading of DPTs in a manner that trivialises the high risks of trading in DPTs, nor engage in marketing activities that target the general public.”
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