US State Vermont Senator Attempting to Pass Bill to Collect Taxes Using Cryptocurrencies

Cryptocurrencies are gaining momentum day after day. A lot of nations and governments are looking to regulate these digital currencies and monitor the markets. Financial organizations and banks are growing wary and some are even freezing accounts of customers who send funds to cryptocurrency exchanges.

In the US state of Vermont, the future potential of cryptocurrencies is understood, and efforts to regulate and promote them are underway. On January 3rd, Vermont Senator Alison Clarkson introduced a new bill that would allow certain companies to be labeled as “digital currency limited liability companies”. This policy would be a big leap forward as there is a surge of new companies that are based around cryptocurrencies and the blockchain technology. Many companies rely on existing blockchains, like the ethereum network, but others have their own. This is why a legislation “recognizing” and truly setting these companies apart would prove useful.

In addition to being registered as digital currency LLCs, if these companies are creating a cryptocurrency and making it available for purchase through a network, they will have to pay a $0.01 tax on each new unit that is issued, purchased, or traded. This will be the first taxation regulation of its kind, and it will be interesting to see how the state will put it in place. There have been a lot of discussions regarding taxation of cryptocurrencies, and it is one of the big issues governments have to face. For now, cryptocurrencies are taxed once profits are transferred back to fiat currency (dollars, euros, pounds etc.), but government officials around the world are hoping to change that in the upcoming years.

Clarkson’s bill has already been passed onto the Committee on Economic Development, Housing and General Affairs. The bill also aims to increase the exposure of the blockchain and new technologies, and wants the state to take advantage of potential opportunities that come with it. Promoting “education and adoption of financial technology in the public and private sectors” is also one of the goals of the legislation. Moreover, Clarkson also hopes to organize a conference, where those digital currency LLC companies and industry leaders would be able to meet with state officials and talk about innovations in the sector. These are promising proposals that would bring adoption of cryptocurrencies closer.

TLDR: A Vermont Senator has introduced a bill that aims to label cryptocurrency companies as digital currency LLCs. It will also tax every new unit of a cryptocurrency that is either created or traded.

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