Examining Taxation of Fiat Money and Bitcoins vis-a-vis Regulated Cryptocurrencies

9 Pages Posted: 4 Oct 2016

See all articles by Kartik Hegadekatti

Kartik Hegadekatti

DoPT,Government of India

Yatish S G

Government of India, Ministry of Railways

Date Written: October 2, 2016

Abstract

In this paper, we examine the Taxation aspects of Fiat money and Bitcoins vis-a-vis Regulated Cryptocurrencies. We start off by briefly explaining the concept of cryptocurrencies (also referred to as cryptocoins in this paper). We then discuss the concept of Regulated and Sovereign Backed Cryptocurrencies (RSBCs). Then we envisage a scenario where cryptocoins are the main medium of exchange. The taxation aspects of Paper money, Bitcoins and RSBCs are then deliberated with the pros and cons of taxation for each currency format. The currency that can support an Automated Tax Regime is also debated. Finally, the paper concludes by arranging in ascending order, the currencies which are easily amenable to and compliant with taxation policies and laws.

Keywords: Taxation, Bitcoins, K-Y Protocol, NationCoins, RSBC

JEL Classification: E42, E52, F38, H21, H24, H26, K34

Suggested Citation

Hegadekatti, Kartik and S G, Yatish, Examining Taxation of Fiat Money and Bitcoins vis-a-vis Regulated Cryptocurrencies (October 2, 2016). Available at SSRN: https://ssrn.com/abstract=2846645 or http://dx.doi.org/10.2139/ssrn.2846645

Kartik Hegadekatti (Contact Author)

DoPT,Government of India ( email )

DoPT,North Block
New Delhi, Delhi 110001
India
+91-9483715544 (Phone)

HOME PAGE: http://hegadekatti.blogspot.in/

Yatish S G

Government of India, Ministry of Railways ( email )

1 Floor, Operations Division
DRM Office, Next to City Railway Station
BANGALORE, KARNATAKA 560023
India
9886601577 (Phone)
08022876111 (Fax)

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