Ron Paul Pushes for Legalization and Taxation of Bitcoin in Tune with Traditional Money

The former U.S. Congressman suggested that Bitcoin is a form of money and should be treated as such.

By
Chung Yee
on
June 4, 2021
Category:
Blockchain News

Controversial Stand

Ronald Ernest Paul, better known as Ron Paul, was a long-time congressman and presidential candidate. He served in two subcommittees in the Committee on Financial Services. These subcommittees deal with monetary policies domestically and abroad.

 In his interview with Kitco News, Paul said that Bitcoin should be taxed as an asset and should be treated as a currency. He has been outspoken on many issues, in particular his views on the economy. One of the subjects that he has touched on revolves around the collapse of the American economy. Giving a historical account of fiat that ultimately reverts to zero, he cited how manipulation in the monetary system has destroyed the fundamentals of currency. 

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Critical in his views, Paul has given some truthful but scary accounts of why many distrust the existing monetary system. 

Last year, he forecasted "A coming crisis will likely be triggered by a collapse in the dollar’s value and a rejection of the dollar’s world reserve currency status"
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Paul’s Stance

Ron Paul’s suggestion that Bitcoin should be given the same level playing field as the US dollar (USD) could determine which is the better monetary system. The latter is flawed, inefficient, and is open to manipulation. These flaws became apparent after former President Richard Nixon abandoned the gold standard in 1971. In short, the value of the U.S. dollar bill is supported entirely by faith in the government. The value and viability of cryptocurrency rests entirely on a decentralized blockchain that is trustless and permission less. 


The Bitcoin Standard

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The term ‘Bitcoin Standard’ is coincidentally also part of the title of the book written by Saifedean Ammous. Saifedean sees the Bitcoin standard to be the new gold standard and be the anchor to the international monetary system. There are many reasons to believe that it will be a better monetary instrument. The basic notion of immutability and transparency underpins the entire framework. It replaces the role of modern central banks and it takes away the role of third parties through automation. Being a trustless system is ideally very attractive because there is predictability and certainty. This echoes Paul’s stance that cryptocurrencies potentially offer a better alternative to USD.


Taxation 

Profitable investment in Gold or Bitcoin can be taxed. To prevent any misunderstanding, Bitcoin is taxable but as an asset class. Currency on the other hand is not taxable. Inflation or deflation gives greater or lesser value to the USD and it is not a loss or profit that can be declared for purposes of taxation. Paul calls for an even playing field, mentioning Bitcoin should be classified a currency. He was also quick to state that dollars will still be the legal tender because of the legislative framework recognizing it. 


Predicting the Inevitable Clash 

The clash between USD, Bitcoin, and Gold has always been looming. It has become more likely as mass adoption starts taking place. During the Great Depression, Gold was confiscated from Americans through Executive Order 6102. The action to censor Bitcoin is an obvious recognition of the threat posed by a superior monetary instrument. History may not repeat itself but it rhymes. The American economy through its stimulus package is on life support, sustaining itself through dollar printing. Devaluation of USD will happen and the fear of this impending catastrophe has spurred many to seek alternative stores of value and one clear choice is Bitcoin. 

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Chung Yee

Chung Yee has a legal background and has been involved in research works for the legal and compliance industry. Writing is his passion, centered on topics such as the blockchain and finance. His largest crypto holdings are Solana, Ethereum, and BNB Token.

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