Cryptocurrency is Hybrid Financial Platform but Should Not Get an Individual Treatment

Cryptocurrency is Hybrid Financial Platform but Should Not Get an Individual Treatment

There is much more to virtual currencies than just being regular money or currency, and there may prove to be advantageous attributes to fall under a tax regulation in the conventional sense.

Bitcoin and the other cryptocurrencies can also be debt as well as equity, and that naturally leads them to be legalised and taxed similarly to various other types of finance/accounting.

Equity as well as a Debt

Bitcoin can be utilised to purchase other cryptocurrencies, and Blockchain startups in the manner of ICOs and other procedures, so it can be discussed that they are an equity investment alternative. While these Blockchain startups issue similar to shares in the form of an ICO, it is being compared to equity.

Cryptocurrencies are considered as particular finance assets, like debt. So specifically, it is a financial instrument that has the benefits of both debts as well as equity.

Explaining the concept of Bitcoin

The discussion about defining Bitcoin can never come to an end and is still an ongoing topic of debate. It was declared as a currency, but many did not purchase that, as soon as its usability changed, its value increased. It attained much more value with time.

Debt, as well as equity, are financial instruments that are used to bring money to finance economic activity. It is a problem-solving puzzle to economic activists why companies use debt in some cases to raise finance, while it is used as equity in other scenarios.

Dequity

Though, when we talk about cryptocurrency, it can be explained as “dequity”, i.e., a concept brought into existence by the 2009 economist Laureate Oliver Williamson. He explained dequity as an instrument of both equity and debt.

How should dequity be legalised?

If a cryptocurrency can be called as dequity, then it can come under the conventional norms of legalisation as well as taxation. So, how can equity be regulated then?

Recently, cryptocurrencies are either adopted happily, or several regulators are changing the regulations for them. Instead of all the complications of cryptocurrency, it actually is easy-going: it is a financial instrument that includes all the benefits of money involving debt and equity. It’s definitely a viable and potential hybrid of all the three.

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