Random Blog on Crypto (Part 16) : How are cryptocurrencies taxed?

Cryptocurrencies have introduced a new layer of complexity to the world of taxation. Taxation issue of crypto is always a complex issue. As crypto is not a legal tender in many of the countries throughout the world so it is very difficult to treat this currency as an asset in those countries and it cannot be treated as currency well. Sometimes it can be compared with assets and sometimes it can be considered as currency as well. Finding the nature is very difficult for currency and with that difficulty that taxation issues are also difficult.

If it is an asset when it will be treated as an asset and will be regulated by the asset Management regulatory board. When crypto will be treated as currency then it will have the features of currency and will be treated by the authority of currencies like banks. And depending on the regulatory condition the taxation system and the amount is also different.

Some of the activities of crypto like exchanging, holding, buying and selling are not recorded properly to expose to the concerned authority that's why it is difficult for them to impose tax on the assets. But this is not a problem I believe because when something will be regulated then it will be open to some regulated bodies so that they can use the data for their taxation law implication. In the current system, many of the cases crypto is out of regulatory conditions then the assets holding, buying, selling , exchanging , mining , and trading all the things are not exposed to anyone being a decentralized system based on blockchain..

When it is the matter of income tax then it has to have a body exposed so that they can check what the income is showing by the person in their income tax file. Most countries and regulatory bodies think that it is not possible to regulate or impose tax on crypto assets but I don't believe or agree with that statement. I think it's possible if the regulatory body wants to pay attention on it. They have to set some rules for Blockchains to make a provision of exposing data to a very few or certain groups of people for regulatory issues. They will not be able to change the data, rather will see the happening. I think that a proper exhibition can be maintained in the crypto assets and systems.

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