Currency arbitrage would be taxed as normal income. The more specific example being buying pesos, then reselling pesos for US dollars at a gain. There are exclu

Currency arbitrage would be taxed as normal income. The more specific example being buying pesos, then reselling pesos for US dollars at a gain. There are exclusions for currency conversion below a threshold for personl expenses such as travel, per Section 988 in the US: https://www.investopedia.com/terms/s/section-988.asp https://www.investopedia.com/terms/s/section-988.asp Since the only 'allowed' currency is US dollars here, any exchange to a non-US-dollar 'currency' (pesos, bitcoin, whatever) then using that to buy/sell things would implicitly trigger either a capital gains or a regular income event upon conversion to another form of value. It's no different than buying and selling art, or any goods. If I constructed all of business around bartering using rice... technically I would owe taxes on all those transactions.