The US government doesn’t have a problem with private currencies in general, and there are a number of them which are openly thriving. When you hear about them cracking down on private currencies, the real issue is taxes: Some people use private currencies to try to claim that they don’t have any income, and that the income tax therefore does not apply to them. Needless to say, the government views the matter differently.
That erosion appears to be proceeding at a real slow rate. Not only are dollars accepted throughout the United States, but millions of people in other countries prefer to have dollars over their own national currency.
In fact, the IRS will now take payment in bitcoins. I was wondering why they did this, since they don’t have to. They only have to accept US money. And you’d think the government would not try to encourage their use, since one of the biggest uses is by criminals to launder and transfer their ill-gotten wealth. But maybe you just nailed the reason there.
I haven’t heard anything about the IRS accepting Bitcoin for payment of taxes. I’ll ask for a cite on that.
They have issued guidance declaring Bitcoins to be property for tax purposes, as opposed to currency. That means you need to treat changes in value as capital gains/losses, which is a headache if you plan to use Bitcoin to do a lot of buying and selling.
Apparently it’s a stretch of the real situation. What’s happened is some private companies have been set up to convert bitcoins into dollars. You pay the company in bitcoins and they make a dollar payment for you to businesses that only accept dollars. One of the examples given is how you could use this to pay the IRS.
So in a broad sense, you’re paying the IRS with bitcoins. But only through an intermediary. The reason companies like this exist is because the IRS does not directly accept bitcoins.
Little Nemo’s explanation may be right. Or it could be that someone in the media misunderstood that guidance. Or maybe I just went by misleading headlines.
The US made gold coins more or less illegal for currency purposes, so hell yeah, they could make BitCoins illegal.
They can make it illegal, and several countries have, China being the main one.
Remember when it was illegal to own gold in the US? If they can do that, they can certainly make it illegal to own Bitcoins or other cryptocurrencies.
Bah! Ninja’d!
Iceland, surprisingly enough, has some of the strongest laws prohibiting bitcoins. But they’re not specifically targeted at bitcoins. Iceland has general laws which put restrictions on foreign currency and bitcoins fall under these.
LN, you must surely be aware that the status of the dollar as the world’s reserve currency is under serious threat.
The Fed’s policy of printing trillions of dollars (with no gold to back it up btw …thank you Dicky) … while the US is running the largest governmental deficit in recorded history, is historically, a recipe for disaster. This policy has never worked for any government, in any country, at any time, and it will not work now.
Sure , stocks are at an all time high at the moment, but that is solely due to the Fed’s money printing policy .
It is totally understandable that nobody wants to accept the fact that the US is headed on a collision course with disaster … but the fact is … it is.
When exactly will the shit hit the fan ??? … I don’t know, neither does anybody else, but one thing for sure …the shit ***will ***hit the fan
Gold is less valuable than the full faith and credit of the USA. Gold is just another commodity, and one you can’t eat.
I find that very touching …
I believe IRS expects taxes from income in barter. Never heard of anyone declaring it.
I think there are various on-line web-sites you can find that run bartering communities, which serve as middle-men for people to do barters. Some try to be legit and above-board, and they keep records of the barters they mediate, which are made available to the IRS.
Google on-line bartering communities to find a whole bunch of them.
Forget it, DrD. You can’t argue with gold bugs. They are their own kind of crazy.
Sure, dollars are facing some problems. And they may get replaced as the world’s reserve currency (which would be a new problem). But the fact that dollars haven’t been replaced by the euro or the yuan shows that dollars are still seen as the best currency by people around the world.
This crisis you’re seeing doesn’t exist. The inflation rate right now is actually quite low.
If going off the gold standard is an economic disaster, it’s a really slow moving one. We’ve been off the gold standard for decades. So has every other country in the world. (And the bitcoin has never been backed by gold.) But the economy has greatly expanded in this period. Which is really no surprise - a gold standard is actually a brake on economic growth.
Will the dollar collapse someday? Yeah, probably. But it won’t be anytime soon. And I’d be willing to bet it will long outlast the bitcoin. If you were to ask me which I thought was more likely: the bitcoin collapsing in the next fifty weeks or the dollar collapsing in the next fifty years - I’d pick the bitcoin.
I’ve heard this a number of times by different people. What currency is going to replace the USD? There is no realistic alternative in part because the USD is so widely trusted.
<Pendant moment>
The United States happens to have a federal government, but that is because it is a government superimposed over several sovereign dependent states. Not all nations are federal; France for instance is a unitary state, where its administrative regions are subordinate to the national government.
</Pendant moment>
Thus your question is more properly, “Could national government’s outlaw bitcoins?”
To answer this question: yes; the national government could, provided regulation of currency and currency-like batter were within its Constitution/charter/authority/etc.
(To answer your original question: most likely; the only reason Federal government could not pass such legislation would be if it currency regulation were reserved for its dependent regions.)
Not quite, a company or person is only REQUIRED to accept the US dollar in payment of debt. They could legally refuse cash for any non-debt transaction (they also have no obligation to even perform any non-debt transaction, for that matter).