The U.S. Bureau of Labour Statistics has released a CPI summary today and CPI has been increased by 8.6%. Recently, U.S. Senators introduced the long-awaited bipartisan framework of U.S. Federal oversight of cryptocurrency regulation.
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U.S. Inflation hits 40 years high.
Prices in the United States advanced in May, reaching their highest level since 1981, a 40-year high, as the Consumer Price Index (CPI) climbed by 8.6%, according to the US Bureau of Labor Statistics' current CPI Summary. In April, the inflation rate was 8.3% and it was expected that the inflation rate would be the same as that. There are signs that the FED is planning to increase the interest rates by 50 bps. A further hike in interest rate could affect the crypto market, and the crypto market is struggling throughout the year.
U.S. Crypto Bill by Senators.
Recently, Senator Lummis and Senator Gillibrand officially introduced the Crypto Bill in U.S. Senate. This Bill includes proposals related to the classification of digital assets, stable coins regulation, crypto taxation policy, and many more.
Let's understand a few major laws mentioned in the bill:
Jurisdiction and Registration: The bill proposes to remove some cryptocurrencies from SEC’s (Security and Exchange Commission) Jurisdiction and place them under the CFTC (Commodity Futures Trading Commission) Jurisdiction. This means major cryptocurrencies like Bitcoin and Ethereum will be placed under CFTC Jurisdiction and the CFTC will oversee the crypto spot market. NFT which is one of the most trendy topics has been included in Virtual Digital Assets and CFTC will oversee this. Stable Coins such as TetherUSD and Centralized exchanges like Binance, Coinbase, and more should be legally registered as a business entity. Even Crypto projects and DAO should be legally registered.
Capital Gains and Miners Rewards: The Bill promise no capital gains taxes on any transaction under 200 USD. The exemption allows Bitcoin holders for buying goods and services without paying any taxes, this doesn’t mean holders are not liable to pay capital gain taxes when they use their bitcoin to buy Digital Assets, Security, Commodity, Cash, or Cash Equivalents. Crypto Miners will be liable to pay income tax only when they sell their assets in exchange for cash. This is the key point of this bill and it is not been discussed much, this will be a huge relief for the mining industry as currently, they are suffering from unfair tax treatment. Now if the bill is passed then the crypto miners will just have to pay the income tax when they spend their crypto or sell the same to buy cash.
This means capital gains under 200 USD will not be taxed and Miners are liable to pay taxes on mining only when their assets are sold or spent. Senators are also commissioning the Office of Management and Budget, CyberSecurity and Infrastructure Security Agency, the Director of National Intelligence, and the Defense Department to look at the Digital Yuan, China’s Central Bank's Digital Currency. The bill still needs to be passed by four more committees to be officially implemented.
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