What happened?Friday's attack on cryptocurrencies is not only within the United States, but also outside.Twin reports this morning revealed that the International Monetary Fund doesn't like cryptocurrency and that the United States Congress is serious about taxing the profits of investments in cryptocurrency.Prices of many of the most prominent names in cryptocurrency have fallen as of 9:45 AM EDTWhat are you waiting for?The IMF has published a blog this week arguing that cryptocurrency isn't suitable for use as "national currency". El Salvador took this step last month.IMF calls cryptocurrencies like Bitcoin "extremely volatile," which is not good news for people who need "store value" and "unrelated the real economy." It also says that crypto won't be popular in countries with stable inflation, exchange rates, and credible institutions. Additionally, crypto as a national currency can make "domestic prices...highly unstable" in less secure countries.IMF points out, too, that cryptocurrency is used often to "launder illgotten money, fund terrorist activities, and evade tax."Congress seems to have heeded the call. CoinDesk reported that the bipartisan infrastructure bill passed yesterday's preliminary Senate vote. It "promotes to raise $28billion from crypto investors." This would allow for the siphoning of cryptocurrency profits to fund bridges and highways across the United States. CoinDesk summarizes that "any broker who transfers any digital assets" must file a return reporting the transaction to IRS in order to tax the profits.What now?What does this all mean for crypto investors? These reports contain both good and bad news. One, yes, there is a clear trend in crypto for governments and international organizations to work with governments to add new reporting requirements, taxes and other regulations to cryptocurrencies. This could reduce their appeal to both investors and users.However, I fear that Congress might get its hands in the cookie jar here. Washington may soon become convinced it can make a profit by taxing the profits of other cryptocurrency owners. Then it could be addicted and fearful to see that revenue disappear. The legislators may be more inclined to ban cryptocurrency outright than regulate them.You can call it wishful thinking or a silver lining, but I think the end result of these regulatory efforts could be to secure cryptocurrency's future.
