The post Minneapolis Fed Calls for Bitcoin Taxation appeared on BitcoinEthereumNews.com.

The Minneapolis Federal Reserve Bank has released a study proposing that Bitcoin and similar cryptocurrencies be subjected to taxation or outright prohibition to address ongoing budget deficits. The report, published on October 17, asserts that Bitcoin’s finite supply creates challenges for effective fiscal management. What Are the Fed’s Concerns? This analysis highlights a “budgetary balance trap” wherein the existence of Bitcoin necessitates governmental efforts to maintain budget balance due to its limited supply and lack of resource demands. This aspect complicates traditional fiscal strategies. Is Institutional Investment on the Rise? Matthew Sigel, head of digital asset research at VanEck, pointed out that similar to critiques from the European Central Bank, the Minneapolis Fed appears focused on promoting government debt as the sole risk-free asset. Despite these viewpoints, institutional interest in cryptocurrencies is surging. A significant 80% of institutional investors plan to expand their crypto investments following the expected approval of Bitcoin and Ether ETFs in 2024. Neel Kashkari, the president of the Minneapolis Fed, expressed concerns regarding cryptocurrencies, labeling them as facilitators of criminal activities. He remarked, “very few transactions occur with cryptocurrency,” suggesting that their primary use is for illegal purposes. In contrast, Nic Carter criticized this perception, advocating for a more balanced viewpoint. The crypto community has shown varied responses to these allegations. The Minneapolis Fed advocates for the taxation of cryptocurrencies to manage budget deficits. Bitcoin’s fixed supply complicates fiscal policies for governments. Institutional investors are increasingly optimistic about crypto assets despite regulatory scrutiny. The ongoing dialogue surrounding cryptocurrency regulations indicates a pivotal moment in financial discourse, with traditional institutions grappling to integrate these digital assets into the broader economic framework. Disclaimer: The information contained in this article does not constitute investment advice. Investors should be aware that cryptocurrencies carry high volatility and therefore risk, and should…

---

Filed under: News - @ October 23, 2024 5:20 am