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Proposed bill calls for moratorium on virtual-currency regulation

Congressman's 'Cryptocurrency Protocol Protection and Moratorium Act' would also modify the IRS property ruling.

December 5, 2014

Congressman Steve Stockman (R-TX), who did not seek re-election in 2014, has submitted bill HR 5777 to Congress, calling for a five-year moratorium on virtual-currency regulation in the United States.

The bill – titled the "Cryptocurrency Protocol Protection and Moratorium Act" – suggests that no federal or state government make "any statutory restrictions or regulations" concerning virtual currency for five years beginning June 2015. Specifically that "no new statutes, regulations or advisory opinions be passed, implemented, enforced or issued governing the creation, use, possession or taxation of cryptocurrencies, the protocols governing each and the data, codes, algorithms or other calculations comprising each, until the expiration of the moratorium…."

In addition, the bill calls for treating virtual currencies "…as currency instead of property in order to foster an equitable tax treatment and prevent a tax treatment that would discourage the use of any cryptocurrency." And that "taxpayers accepting cryptocurrency in trade or commerce should be deemed to realize actual income only when cryptocurrency is monetized through conversion or exchange into dollars or any official government currency, and that fair market value should be calculated as net proceeds from the conversion."

The bill has been referred to the House Committee on Ways and Means and the House Committee on Financial Services.

The entire bill can be read here.