Fintech Notes

Taxing Stablecoins

Author/Editor:

Christophe J Waerzeggers ; Irving Aw ; Jess Cheng

Publication Date:

May 25, 2023

Electronic Access:

Free Download. Use the free Adobe Acrobat Reader to view this PDF file

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.

Series:

Fintech Notes No 2023/002

Subject:

Currencies Digital currencies Economic sectors Income and capital gains taxes Money Tax policy Taxes Technology Value-added tax Virtual currencies

Frequency:

occasional