## Taxing Cryptocurrencies

_IMF Working Papers, July 5, 2023_

## Source details

**Canonical URL:** [Taxing Cryptocurrencies](https://www.imf.org/en/publications/wp/issues/2023/06/30/taxing-cryptocurrencies-535510)

## Other formats

- [Markdown version](/en/publications/wp/issues/2023/06/30/taxing-cryptocurrencies-535510/index.md)
- [Structured JSON version](/en/publications/wp/issues/2023/06/30/taxing-cryptocurrencies-535510/index.json)
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## Bibliographic details
- Authors: Katherine Baer, Ruud A. de Mooij, Shafik Hebous, Michael Keen
- Published: July 5, 2023
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9798400246586.001

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### Overview
- Paper reviews issues that arise as policymakers attempt to accommodate cryptocurrencies within tax systems not designed to handle them.
- Authors: Katherine Baer, Ruud A. de Mooij, Shafik Hebous, Michael Keen.
- Date: July 5, 2023.

### Key findings
- The greatest challenges are for implementation: crypto’s quasi-anonymity is an inherent obstacle to third-party reporting.
- Design problems arise from cryptocurrencies’ dual nature as investment assets and means of payment.
- There is a compelling case for corrective taxation of carbon-intensive mining.
- Ownership is highly concentrated at the top, but many crypto investors have only moderate incomes.
- The capital gains tax revenue at stake worldwide may be in the tens of billions of dollars.
- More profound risks may ultimately be for VAT/sales taxes.

### Policy implications and recommendations
- Strengthen implementation measures that address quasi-anonymity and the lack of third-party reporting.
- Consider tax design that reflects cryptocurrencies’ dual nature as both investment assets and means of payment.
- Implement corrective taxation targeting carbon-intensive mining activities.
- Monitor distributional implications given concentration of ownership alongside moderate-income participation.
- Evaluate VAT/sales tax frameworks for vulnerabilities posed by crypto-based transactions.

### Technical and implementation challenges (summary)
- Quasi-anonymity of crypto transactions impedes conventional third-party reporting mechanisms.
- Distinguishing between use as an investment asset versus use as a means of payment creates tax design complexities.
- Carbon-intensive mining presents a clearer and more straightforward basis for corrective taxation compared with other crypto tax measures.

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## Content in this bundle

- **Working Paper**
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  - [Working Paper (PDF)](/-/media/files/publications/wp/2023/english/wpiea2023144-print-pdf.pdf){rel="external" type="application/pdf"}

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_Source: https://www.imf.org/en/publications/wp/issues/2023/06/30/taxing-cryptocurrencies-535510_