Her Majesty’s Revenue and Customs agency has concluded in a new ruling that cryptocurrencies are not to be recognized as real money, but tax laws will still apply to their multiple variations. According to the new ruling that the HMRC released, every single cryptocurrency that is used as a means of exchange needs to be identified as taxable. This includes things such as utility tokens, security tokens, exchange tokens and other varieties of cryptos.
In the past, the HMRC was taxing only cryptos that were being used as securities, meaning coins that were used to achieve monetary gain on the market. This was simplified due to the local regulation of having crypto exchanges supply the HMRC with customer trading data.
According to an industry expert from CasinoCrunch, the HMRC will start chasing gaming companies that allow their customers to use local utility tokens as well, which is completely unprecedented in the rest of the world. The tokens being used on these platforms have no real monetary gain, as they’re usually classified as stable coins. The creators understand this as if it had increasing value it would immediately be classified under security tokens, thus taxed accordingly.
Not recognizing something as real money and then placing taxes is quite bizarre, but it’s the route the HMRC decided to take.