The U.S. Internal Revenue Service (IRS) reportedly released guidelines that state that digital assets, which now explicitly include stablecoins, NFTs and cryptocurrencies, are taxed pursuant to the same rules. This is a change from last year's guidance, which included a virtual currency section defining a digital token as "a unit of account, a store of value, or a medium of exchange." According to reports, taxpayers who have "disposed of any digital asset in 2022" - whether as a sale, exchange, gift or other transfer - are required to report this income and pay capital gains tax. Notably, capital gains are taxed at a lower rate than the tax rate applied to the disposition of collectibles such as collectible art, antiques or gems.
The Office of the Comptroller of the Currency (OCC) recently announced that it will establish an Office of Financial Technology, which will build on and include the Office of Innovation. According to an OCC press release, the Office will be created in early 2023 to "provide strategic leadership, vision, and perspective for the OCC's financial technology activities and related supervision."
Commodity Futures Trading Commission (CFTC) Commissioner Christy Goldsmith Romero recently gave a speech in which she stated that "crypto presents many similar financial stability risks as the traditional financial system, with parallel themes to 2008, and the potential for that risk to become systemic." She stated that the 2008 financial crisis was so severe because of "unchecked risk-taking by financial institutions that were highly interconnected to each other," and that interconnectedness caused contagion risk and run risk. Commissioner Romero ran through a series of events that she posits have caused larger financial distress in the crypto market overall due to these risks, such as stablecoins breaking the buck and triggering redemptions to mass liquidation of bitcoin causing a general crypto sell-off and to companies defaulting on loans and causing other companies to file for bankruptcy or go into financial distress. She contended that similar "[o]paque, complex, leveraged, and unregulated products" that led to "underappreciated risk" in the 2008 financial crisis are present in the crypto market. Commissioner Romero advocated for a "same risk, same regulatory outcome" approach, which begins with an assessment of risk, particularly financial stability risk. The Commissioner stated her belief that the crypto markets need regulation that will limit vulnerabilities to contagion risk and run risk.
For more information, please refer to the following links:
- The IRS Includes NFTs In 2022 Tax Language
- OCC Announces Office of Financial Technology
- Remarks of CFTC Commissioner Christy Goldsmith Romero before the International Swaps and Derivatives Association's Crypto Forum 2022, New York: Financial Stability Risks of Crypto Assets
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