July 03, 2014
Fitch reports on the growing corporate acceptance of the virtual currency.
Fitch Ratings said on Tuesday that corporate acceptance of Bitcoin, the virtual currency, is becoming more accepted by corporates as a payment mechanism. The rating firm pointed to the recent acceptance by DISH, Expedia and Newegg. The trend poses some interesting challenges for treasury and tax, especially since the IRS has ruled that Bitcoin is not a currency, but an asset subject to capital gains taxes (see related story here).
Fitch Ratings said on Tuesday that corporate acceptance of Bitcoin, the virtual currency, is becoming more accepted by corporates as a payment mechanism. The rating firm pointed to the recent acceptance by DISH, Expedia and Newegg. The trend poses some interesting challenges for treasury and tax, especially since the IRS has ruled that Bitcoin is not a currency, but an asset subject to capital gains taxes (see related story here).
Fitch also noted that, last month, Apple made the virtual currency app Coin Pocket available. This can be used to send and receive Bitcoins.
The rating firm said, “Companies like DISH, Expedia, and Newegg generate meaningful revenue and an increase in payment for products and services via Bitcoin could boost the payment system. However, as we’ve stated previously, Bitcoin is still small relative to both major payment processors and global currencies despite increases in its acceptance as a payment system.”
The price of Bitcoins has ticked up in the last six weeks, from $489 on May 21 to $639 on June 30. The rise in the price poses some interesting challenges for tax attorneys at the firms that accept Bitcoins for payments.