Examining Taxation of Fiat Money and Bitcoins Vis-A-Vis Regulated Cryptocurrencies

Hegadekatti, Kartik and S G, Yatish (2016): Examining Taxation of Fiat Money and Bitcoins Vis-A-Vis Regulated Cryptocurrencies. Published in: International Finance eJournal , Vol. 8, No. 117 (14 October 2016)

Abstract

In this paper, we examine the Taxation aspects of Fiat money and Bitcoins vis-a-vis Regulated Cryptocurrencies. We start off by briefly explaining the concept of cryptocurrencies (also referred to as cryptocoins in this paper). We then discuss the concept of Regulated and Sovereign Backed Cryptocurrencies (RSBCs). Then we envisage a scenario where cryptocoins are the main medium of exchange. The taxation aspects of Paper money, Bitcoins and RSBCs are then deliberated with the pros and cons of taxation for each currency format. The currency that can support an Automated Tax Regime is also debated. Finally, the paper concludes by arranging in ascending order, the currencies which are easily amenable to and compliant with taxation policies and laws.

• Item Type: MPRA Paper
• Language: English
• Keywords: Taxation, Bitcoins, K-Y Protocol, NationCoins, RSBC
• Subjects: E - Macroeconomics and Monetary Economics > E4 - Money and Interest Rates > E42 - Monetary Systems ; Standards ; Regimes ; Government and the Monetary System ; Payment Systems; E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E52 - Monetary Policy; F - International Economics > F3 - International Finance > F38 - International Financial Policy: Financial Transactions Tax; Capital Controls; H - Public Economics > H2 - Taxation, Subsidies, and Revenue > H21 - Efficiency ; Optimal Taxation; H - Public Economics > H2 - Taxation, Subsidies, and Revenue > H24 - Personal Income and Other Nonbusiness Taxes and Subsidies; H - Public Economics > H2 - Taxation, Subsidies, and Revenue > H26 - Tax Evasion and Avoidance

References

[1] Hegadekatti, Kartik and S G, Yatish, The K-Y Protocol: The First Protocol for the Regulation of Crypto Currencies (E.G.-Bitcoin) (February 13, 2016).

[2]Feige, Edgar L. & Cebula, Richard (January 2011). "America's Underground Economy: Measuring the Size, Growth and Determinants of Income Tax Evasion in the U.S.". Retrieved 2012-03-05.