Table of Contents
- 1 Policy Recommendations
- 1.1 Amend Barter Exchange Reporting Requirements
- 1.2 Remove Outdated State Laws That Prohibit Creation of Complementary Currencies
- 1.3 Create Reasonable Exemptions to Money Transmission Regulations
- 1.4 Create a Single Federal Agency to Regulate Money Transmission, and Eliminate State Money Transmission Licencing Requirements
- 1.5 Repeal 18 U.S.C. § 336 to Enable Issuance of Currencies With a Value of Less Than $1
- 1.6 Amend the U.S. Constitution to Allow States and Cities to Issue Currencies
- 2 Current Rulemaking and Legislation
Amend Barter Exchange Reporting Requirements
SELC finds that the current reporting regulations under section 1.6045-1 are overly burdensome on community currency organizations that are regulated as barter exchanges. As such, we are proposing that the IRS amend the regulation to eliminate transactional reporting and allow for aggregate reporting, instead, for all members or clients. See this memo for summary of proposed changes to the reporting requirements and amended regulation language.
Remove Outdated State Laws That Prohibit Creation of Complementary Currencies
In July 2014, California took a significant step toward legitimizing complementary currencies with the California Alternative Currencies Act (AB 129), a bill that repealed an outdated section of the CA Corporations Code prohibiting the creation of complementary currencies. Click here to read more about the California Alternative Currencies Act. Currently, Massachusetts, Virginia, and Arkansas still have laws prohibiting the creation of complementary currencies.
Create Reasonable Exemptions to Money Transmission Regulations
In April and July of 2014, the California Department of Business Oversight sought comments on potential amendments to the regulations that implement the California Money Transmission Act (MTA). See more information here and click for comments submitted to the California DBO by the Sustainable Economies Law Center (SELC) on:
Create a Single Federal Agency to Regulate Money Transmission, and Eliminate State Money Transmission Licencing Requirements
See this comment letter by Think Computer Corporation, suggesting that the federal Bureau of Consumer Financial Protection regulate money transmission and pre-empt state licencing requirements for money transmitters.
Repeal 18 U.S.C. § 336 to Enable Issuance of Currencies With a Value of Less Than $1
Remove 18 U.S.C. § 336 from law in order to enable the creation of currencies with a value of less than $1. While this law is still on the books, it will be difficult to use complementary currencies to purchase small items and to make change.
Amend the U.S. Constitution to Allow States and Cities to Issue Currencies
See more information here.
Current Rulemaking and Legislation
(Last updated May 2014)
- Taxation of Virtual Currencies: The IRS has a current request for comments on tax implications of virtual currencies: “The Treasury Department and the IRS request comments from the public regarding other types or aspects of virtual currency transactions that should be addressed in future guidance. […]”
- CA Money Transmission Act: The California Department of Business Oversight recently sought comments on draft regulations to implement the CA Money Transmission Act. See above for comments submitted by SELC.