Examining Taxation of Fiat Money and Bitcoins vis-a-vis Regulated Cryptocurrencies
9 Pages Posted: 4 Oct 2016
Date Written: October 2, 2016
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.
Keywords: Taxation, Bitcoins, K-Y Protocol, NationCoins, RSBC
JEL Classification: E42, E52, F38, H21, H24, H26, K34
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