Taxing cryptocurrencies

Baer, Katherine; De Mooij, Ruud; Hebous, Shafik; Keen, Michael

doi:10.1093/oxrep/grad035

Cited by 9 publications

(2 citation statements)

References 22 publications

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“…The third justification is that lack of regulation and lack of "Know Your Customer" rules can make taxation of gains problematic. Baer et al (2023) have noted that policymakers are struggling to accommodate cryptocurrencies in tax systems not designed to handle them. The pseudonymity of cryptos militates against third-party reporting, whilst identification and calculation of gain is hindered by cryptocurrencies' dual nature as investment assets and means of payment.…”

Section: Regulation Of Cryptos: Relevance Of Free Bankingmentioning

confidence: 99%

Free banking theory: literature review and relevance to the regulation of cryptocurrencies debate

Norton

2024

JFRC

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Purpose Free banking theory, as developed in Adam Smith’s 1776 treatise, “The Wealth of Nations” is a useful tool in determining the extent to which the “invisible hand of the market” should prevail in regulatory policy. The purpose of this study is to provide a timely review of the literature, evaluating the theory’s relevance to regulation of financial technology generally and cryptocurrencies (cryptos) specifically. Design/methodology/approach The methodology is qualitative, applying free banking theory as developed in the literature to technology-defined environments. Recent legislative developments in the regulation of cryptocurrencies in the UK, European Union and the USA, are drawn upon. Findings Participants in volatile cryptocurrency markets should bear the consequences of inadvisable investments in accordance with free banking theory. The decentralised nature of cryptocurrencies and the exchanges on which these are traded militate against coordinated oversight by central banks, supporting a qualified free banking approach. Differences regarding statutory definitions of cryptos as units of exchange, tokens or investment securities and the propensity of these to transition between categories across the business cycle render attempts at concerted classification at the international level problematic. Prevention of criminality through extension of Suspicious Activity Reporting to exchanges and intermediaries should be the principal objective of policymakers, rather than definitions of evolving products that risk stifling technological innovation. Originality/value The study proposes that instead of a traditional regulatory approach to cryptos, which emphasises holders’ safety and compensation, a free banking approach combined with a focus on criminality would be a more effective and pragmatic way forward.

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Section: Regulation Of Cryptos: Relevance Of Free Bankingmentioning

confidence: 99%

Free banking theory: literature review and relevance to the regulation of cryptocurrencies debate

Norton

2024

JFRC

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“…Besides other financial instruments, crypto investment presents unique challenges and risks for investment managers due to high volatility, price fluctuations, and regulatory and compliance risks (Arsi et al 2022). Similarly, cryptocurrencies have features similar to other financial instruments: they are subject to valuation and the medium of exchange (Baer et al 2023). However, due to the high risk and high volatility of value, it is difficult to estimate the contribution assuming its invariable value, which is a guarantee for creditors.…”

Section: Introductionmentioning

confidence: 99%

Risk Management in the Area of Bitcoin Market Development: Example from the USA

Janjua,

Gigauri,

Wójcik-Czerniawska

et al. 2024

Risks

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This paper explores the relationship between Bitcoin returns, the consumer price index, and economic policy uncertainty. Employing the QARDL method, this study examines both short- and long-term dynamics between macroeconomic factors and Bitcoin returns. Our analysis of monthly time series data from January 2011 to November 2023 reveals that volatile US economic policy indicators, such as high economic policy uncertainty, volatile inflation, and rising interest rates, have recently exerted a negative impact on Bitcoin returns. This study shows that these results are true not only for traditional money but also for cryptocurrencies such as Bitcoin, despite their cardinal features. Its decentralized nature, indicating that it has no physical representation, is not tied to any authority or national economy and relies on a complex algorithm to track transactions. Further, it yields volatile returns that depend on macroeconomic indicators.

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Cryptocarbon: How much is the corrective tax?

Hebous,

Vernon-Lin

2024

Energy Economics

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Taxing cryptocurrencies

Cited by 9 publications

References 22 publications

Free banking theory: literature review and relevance to the regulation of cryptocurrencies debate

Free banking theory: literature review and relevance to the regulation of cryptocurrencies debate

Risk Management in the Area of Bitcoin Market Development: Example from the USA

Cryptocarbon: How much is the corrective tax?

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