The legislators in Virginia have introduced a new bill to define rights for blockchain miners. The bill also deals with the matter of providing tax incentives for users who purchase or sell goods using digital currencies. The Senate of the state has retained that the policy will introduce streamlined laws for miners and digital asset transactions.
At the same time, the bill will also set defined criteria and rules for taxation laws of cryptocurrencies. Senator Saddam Azlan Salim introduced bill #339 on 9th January.
The Senate is now conducting a discussion regarding the document. If the bill manages to get majority approval it will be sent to the House of Delegates for further consideration and from there it could be signed into the law.
Another important aspect of the bill is that individuals and businesses will be able to qualify for an exemption for acquiring a money transferring license in accordance with the document. At the same time, the bill will provide impunity to the miners against industrial zone bans or restrictive noise ordinance requirements within the industrial zones.
Digital Asset Bill will Allow Issuers to Operate without Security Registration
The digital asset bill has also noted that the platform will allow publishers and sellers to continue operating without applying for security registration. However, issuers and sellers have to complete predetermined conditions to make sure that they do not complete the requirements of an investment contract.
On this account, the bill has added three terms of qualification the first one is not trading as an investment contract, the second one is to refrain from marketing the cryptocurrencies to initial buyers as financial investments, and the last one is that the issuers and sellers take necessary precautions to prevent first buyers from buying the digital asset as investments.
At the same time, the bill incentivizes investors to use cryptocurrencies for everyday transactions by providing tax benefits. The bill has further stated that starting from the 1st day of 2024, investors will benefit from a $200 discount in the form of net capital gains as a tax exemption.
The users who are utilizing their cryptocurrency reserves for purchasing goods or services through cryptocurrencies will be able to avail of this tax deductible.
Bitcoin Miners to Experience Revenue Cuts Following Halving
The next and final Bitcoin halving event is set to take place in April this year. However, Canton Fitzgerald, a financial analyst has suggested that BTC miners can experience revenue cuts post-halving event if Bitcoin prices do not rally. The analyst believes that 11 of the biggest Bitcoin mining firms may have to operate unprofitably in such a scenario.
His research has also suggested that Bitcoin mining firms such as Core Scientific, Marathon Digital, and Riot Platforms could face financial pressure following halving event on account of the cost superseding the price of the mined BTCs.
However, Luxor executive opines that miners can use different types of hedging techniques to prevent sustaining losses arising from Bitcoin volatility. Argo Blockchain, a UK-based miner and Hut-8, a Florida-based firm have reported potential loss projections following halving at an expected price of $60K to $62K. Hut 8 has revealed that it currently holds 9,195 Bitcoins valued at $337 million as per current prices.
At a macro scale, analysts believe that Bitcoin supply slashing due to halving will benefit retail investors and lead to a price increment. At the same time, miners who have high operating costs may suffer from the reduction in their revenue.