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IRS: bitcoins are property and not real currency

The IRS finally weighs in on its stance regarding the bitcoin cryptocurrency, which will leave some people unhappy - but could help offer stability.

Published Tue, Mar 25 2014 4:05 PM CDT   |   Updated Sat, Aug 8 2020 10:29 AM CDT

The Internal Revenue Service (IRS) today said it would treat bitcoin and all cryptocurrencies as property, instead of monetary currency, so bitcoin supporters can expect to see the government try and cash in with taxes.

IRS: bitcoins are property and not real currency | TweakTown.com

Unlike US currency, which is issued and regulated by the US Federal Reserve Bank and printed by the US Bureau of Engraving and Printing, bitcoins are not backed by gold or any commodities - and only exists in the digital world.

"Virtual currency that has an equivalent value in real currency, or that acts as a substitute for real currency, is referred to as 'convertible' virtual currency," the IRS notes. "Bitcoin is one example of a convertible virtual currency. Bitcoin can be digitally traded between users and can be purchased for, or exchanged into, U.S. dollars, Euros, and other real or virtual currencies."

The IRS was expected to weigh in for quite some time, as the federal government wants to avoid an electronic black market from being created - and adds clarity for investors.

The popular bitcoin cryptocurrency won't go mainstream anytime soon, according to Forrester, but supporters hope bitcoin help generate a financial revolution.

NEWS SOURCES:irs.gov, media.salon.com

An experienced tech journalist and marketing specialist, Michael joins TweakTown looking to cover everything from consumer electronics to enterprise cloud technology. A former Staff Writer at DailyTech, Michael is now the West Coast News Editor and will contribute news stories on a daily basis. In addition to contributing here, Michael also runs his own tech blog, AlamedaTech.com, while he looks to remain busy in the tech world.

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