Taxing Stablecoins

This Fintech Note considers the challenges that tax law systems face to achieve neutrality in taxing transactions in one specific type of crypto asset: stablecoins.
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Volume/Issue: Volume 2023 Issue 002
Publication date: May 2023
ISBN: 9798400227226
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Topics covered in this book

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Economics- Macroeconomics , Money and Monetary Policy , Taxation - General , Economics / General , stablecoins , value-added tax , crypto assets , digital payments , tokens , income tax , VAT treatment , IMF Fintech Note 2023/002 , taxing Stablecoins , income tax tax treatment , payment token , Virtual currencies , Currencies , Income and capital gains taxes , Digital currencies , Global

Summary

This Fintech Note specifically considers the challenges that tax law systems face to achieve neutrality in taxing transactions in one specific type of crypto asset: stablecoins. Stablecoins are a category of crypto assets that aim to maintain a stable value relative to a specified asset or to a pool of assets, such as sovereign currencies. In this way, they are designed to address the problem of volatility in the prices of crypto assets; price volatility generally makes these assets poor candidates to be a store of value and is one of the main impediments against their more widespread adoption as a means of payment. The prospect of a more widespread adoption of stablecoins warrants a closer look at their tax treatment and associated challenges.