Is the United States Going to ban bitcoin
If yes, that will devastate our ability to innovate. As a result, the U.S. will fall behind other countries that have crypto friendly regulatory regimes. Therefore, a crypto ban should not be an option. To fully leverage this revolutionary technology, the U.S. needs to balance regulations with innovation, similar to its oversight of the internet in the 1990’s.
U.S. Treasury Secretary, Steven Mnucin recently stated that the U.S. government will hold crypto to the highest of standards. One approach that the U.S. could pursue to achieve this goal is to implement an information reporting requirement as it relates to Cryptocurrency. This compliance method would be similar to the FBAR requirement. FBAR requires all U.S. persons that have a foreign bank account to disclose the name and location of the bank as well as the account number and the highest value of the bank account throughout a calendar year (only if exceeds $10,000).
The crypto information reporting requirements would include a list of all public crypto addresses and balances of aggregated accounts for each taxpayer that owns more than a certain threshold of crypto. This information reporting would assign a name to each address and the government can trace every single transaction that each citizen ever made in the past and will ever make in the future. Some people will have a huge problem with this overreaching compliance. However, as practicing CPA’s, we deal with similar foreign compliance on a regular basis. Therefore, it is important to keep an open mind to this type of oversight. Remember, overreaching regulations are still better than an all-out ban. The above scenario is a good example of what the highest of standards could resemble.
The U.S. government should never request private keys because no one should ever disclose this information…ever.