The US Treasury Department said it will require any cryptocurrency transfer worth $10,000 or more to be reported to the IRS.

“Cryptocurrency already poses a significant detection problem by facilitating illegal activity broadly including tax evasion,” the agency said in a new report on tax compliance proposals. “This is why the President’s proposal includes additional resources for the IRS to address the growth of crypto-assets.”

In a new report on tax compliance proposals, the Treasury Department’s Office of Tax Analysis estimated that the move will help raise an additional $700 billion in tax revenue over the next 10 years and could bring in as much as $1.6 trillion in the following decade, reports The Verge.

Requiring large crypto transactions to be reported would help “to minimize the incentives and opportunity to shift income out of the new information reporting regime,” it added.

The decision comes at a time when the price of bitcoin tumbled below $40,000 for the first time in months and other cryptocurrencies were pressured earlier this week after the People’s Bank of China apparently warned against using digital coins as payment.

On Wednesday, nearly $1 trillion was wiped off the market capitalization of the entire crypto sector, before it got stabilised at around $40,000 per coin.

It was the second jolt to the fast-growing crypto market after Tesla last week applied brakes on Bitcoin as a payment mode to buy its electric vehicles, citing environmental harm.

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