As the U.S. Senate headed into their rare Sunday session to add more text to their Bipartisan 1 trillion dollar infrastructure bill, no edits were made regarding their proposed cryptocurrency regulations hidden deep inside of the bill.
You would think a infrastructure bill would just involve language that talks about funding for roads, rail lines, bridges and other infrastructure but hidden deep inside of the new infrastructure bill is a proposal for crypto brokers to report how much someone paid for cryptocurrency.
The new regulation on cryptocurrency is expected to add over 28 billion dollars in tax revenue which would then go towards infrastructure projects.
The proposal in the bill is raising concerns for those who have invested in cryptocurrency to get away from the heavy regulations that have flooded the Stock Market.
Lawmakers want people facilitating trades in Bitcoin and other digital assets to be subject to reporting rules similar to those governing the sale of stocks and other securities https://t.co/9arKUf97MK
— POLITICO (@politico) July 30, 2021
U.S. Congressman Warren Davidson has appropriately coined the cryptocurrency language in the infrastructure bill “The Big Bank Protection Act.”
— Neil Jacobs (@NeilJacobs) July 31, 2021
Politico had more on the story:
Buried in the still-unreleased bipartisan infrastructure package is a sweeping crackdown on cryptocurrency transactions that could generate significant tax revenue for the government and major anxiety in a financial technology industry that thrived during the coronavirus pandemic.
Lawmakers want people facilitating trades in Bitcoin and other digital assets to be subject to reporting rules similar to those governing the sale of stocks and other securities: Brokers would be required to report things like how much people paid for cryptocurrencies.
The proposal is alarming many in the industry, who are expressing fear of being ambushed with a host of new rules they could be stuck with for years.
They see the new reporting requirements as potentially damaging the economic viability of cryptocurrency markets, which have seen a rapid expansion in new users during the pandemic.
Given how much new tax revenue could be at stake and the amount of progress that has been made on the bill, many doubt the language will be eliminated, so they are focused on efforts to make what they see as improvements.
Worried about the cryptocurrency tax reporting that was slipped into the Infrastructure Bill? You shouldn’t be.
1. Disincentives trading
2. Incentives hodl (NgU)
3. Gives gov reason NOT to ban
4. We can just borrow against BTC
There’s always an upside with bitcoin.
— Dennis Porter (@dennis_porter_) July 29, 2021
Coin Desk got the scoop too:
A bipartisan infrastructure bill in Congress proposes to raise $28 billion from crypto investors by applying new information reporting requirements to exchanges and other parties.
According to a draft copy of the bill shared with CoinDesk, any broker that transfers any digital assets would need to file a return under a modified information reporting regime. The draft defined digital assets as “any digital representation of value … recorded on a cryptographically secured distributed ledger” or related technology. It also includes decentralized exchanges and peer-to-peer marketplaces in its definition of brokers.
A separate summary of the bill further clarified that cryptocurrencies are treated as a subsection of the broader digital asset umbrella.
If a bill has over 700 pages you better believe there are clauses in that bill that would upset the general public if they knew about them.
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