Well, they’ve done it.
In one simple stroke of the pen, on one fairly simple page of text, the United Kingdom has basically figured out how to adopt, tax and deal with cryptocurrencies.
It was just that easy.
The text of the brief is posted here, basically outlining what the UK is going to do as far as taxes with the exploding businesses and business surrounding Bitcoin and other cryptocurrencies. One part reads:
However, in all instances, VAT will be due in the normal way from suppliers of any goods or services sold in exchange for Bitcoin or other similar cryptocurrency. The value of the supply of goods or services on which VAT is due will be the sterling value of the cryptocurrency at the point the transaction takes place
The solution is pretty much a “duh” for all of us that have already figured that one out. Essentially it’s saying: “At the time of the transaction, figure out what it’s the currency is worth against the Pound, and then charge that for taxes.” Pretty simple? Can you send that draft over to the ‘States now?
This has been one of the often cited critiques of cryptocurrency – the perceived volatility of the market. This may be temporary, as a particular currency finds its market value and then stabilizes, but let’s say that doesn’t happen and they remain volatile- the solutions for businesses and governments are pretty simple. I’ve already seen vendors who offer a “10 minute snapshot” of market prices in your checkout basket. There’s also the guy who invented cloud based price tags or “Bit tags”. Now that’s a great idea, although probably cost prohibitive for smaller purchases.
Most crypto-enthusiasts want to see their currencies completely de-coupled with Fiat currency, but I don’t think that’s realistic quite yet. Until then we have market snapshots and locally-based market conversions so that everyone can agree what the “price is”.
Nothing is stopping you from trading your Doge, or other alt currency directly for goods and services! In fact, you should! For the newcomers, and later adopters of crypto currency, we need a safe way to make sure they understand the “value” of their purchases. Right now this is going to be related directly with their “normal” currencies.
Hopefully, the future holds a world where this isn’t necessarily the case, and Crypto currency finds its own, unique value and price.
You know what they say, “1 Ðoge = 1 Ðoge” (clearly posted on the Price of Doge)