Unclear what this actually means. Can I pay my credit card bill using crypto? That's a taxable event and a pain in the butt to track.
Can I buy stuff from merchants using crypto, and they receive crypto? Useful, but most merchants will want fiat currency, so someone on the chain will have to convert it to dollars, which again would be a taxable event.
>Consumers can instantly convert their cryptocurrencies into traditional fiat currency, which can be spent everywhere Mastercard is accepted around the world. Currency will always enter Mastercard’s network as traditional fiat currency.
I don't get it - you're trying to avoid paying tax into the society that you're using, benefitting from?
Edit to add: Many replies are acting as if it's difficult to automatically, digitally track conversions and taxes, to then pay your taxes? It's a digital "currency" we're talking about here.
As a point of order, tax avoidance is perfectly legal and encouraged by the IRS. Tax evasion is illegal.
There are many legitimate and ethical reasons why someone would want to avoid taxes they're not obligated to pay.
To your second point about calculating and tracking these expenses, it gets messy really quickly. Certainly do-able, but messy nonetheless. Imagine having a 1099 that is dozens of pages long because it's basically your yearly credit card statement. Imagine having to pay a capital gains tax of like 5 cents on a starbucks purchase. Interestingly enough, this isn't a requirement when paying for things using foreign exchange. You don't have to track gains if you take a vacation to Europe and pay for things using Euros. So I think the goal is to have crypto transaction treated like a Forex purchase.
I think the OP is noting that it makes taxes complicated. Imagine having to track and report every time you went to Starbucks to the IRS, which you would have to if you converted crypto to dollars to buy a coffee.
So how do you protect against the actions of bad actors - who otherwise then have free reign to do whatever the fuck they want in your "country"/area that you seem to not think you'll need to defend from bad actors?
Or you want a wild west, free-for-all environment? In your own house, do you want to have control of who gets to come in or not? It's that same type of control that is inherently tied to security and safety.
> Edit to add: Many replies are acting as if it's difficult to automatically, digitally track conversions and taxes, to then pay your taxes? It's a digital "currency" we're talking about here.
As someone who has to deal with this every year, yes, even if it is "tracked automatically", it's a huge pita to manage.
Let's be a bit more charitable interpreting what they said: "a pain in the butt to track". Lots of little profit taking events to report on your tax form, yeah it's painful. But also means that you intend to pay the tax, not avoid it.
No, I don't mean sales tax. I mean converting from crypto to fiat, in the US, is treated like capital gains. So you get to pay taxes twice on the event.
Can I buy stuff from merchants using crypto, and they receive crypto? Useful, but most merchants will want fiat currency, so someone on the chain will have to convert it to dollars, which again would be a taxable event.