What better way to legitimize a currency than require a sales tax with its use?
This is just what Rep. Steve Stockman, R-Texas, is proposing for Bitcoin in a new bill he plans to introduce called the "Virtual Currency Tax Reform Act." This bill could change the IRS's mandate of how it deals with virtual currencies.
"This is a nascent industry," Stockman said in a statement. "Along with 3-D printers and nanotubes, cryptocurrency is the future. We need to encourage it, not discourage it. There is risk associated with every budding industry in America."
Last month, the IRS announced that virtual currency now counts as property for US federal tax purposes. Stockman's bill goes one step further in saying that Bitcoin and other digital currencies should be treated like any other type of money.
Officials' increasing attention to Bitcoin in the US and overseas shows how quickly the currency is going mainstream. There's been a steady stream of news around Bitcoin exchanges, the establishment of Bitcoin ATMs, and a wild valuation of the currency. Currently, Bitcoin is trading on several exchanges and coin prices range from roughly $300 to more than $7,000.
While digital currencies are gaining increasing acceptance, many federal regulators are still concerned that they may be difficult to regulate. The virtual money can be manipulated or used to launder other types of money. Also, an all-digital currency allows people to evade certain currency controls.
Stockman, however, is an ardent supporter of virtual currencies and was reportedly the first US congressman to accept Bitcoin contributions. But, he isn't the only congressman to express enthusiasm for digital currencies. Rep. Jared Polis, D-Colo., also backs the onset of Bitcoin and has penned letters to the Treasury Department and other federal regulators championing the virtual currency's legitimacy.