The U.S senate is currently deliberating over a USD$1.2T Infrastructure bill that is on a knifes edge of getting passed. Although the crypto component of the bill is only small in relation to the wider scope of the bill which has greater focus on roads & bridges, power, rail, and broadband networks, should the document be passed in its original wording it could have dramatic ramifications to the U.S crypto development community. The main concerning point relates to crypto tax reporting that gives the governing tax body far overreaching authority regarding the level of information they can request from exchanges and individuals, but in particular the reference to the term “broker” which widens the net to software developers and miners. It would be cumbersome and labour heavy in providing such details in reporting where the cost of doing so far outweighs the benefits to the government. The target figure is $28B that would be raised in tax revenue through the tightening of unworkable regulations to contribute to the $1.2T infrastructure bill. The objecting parties aren’t saying don’t tax crypto, just ensure the tax regulations are flexible enough to still allow a thriving industry to evolve. History says that when such stringent laws and regulations are passed, no matter the industry, the result stifles innovation and pushing entrepreneurial talent overseas and the country gets left behind as technology advances freely in other jurisdictions. The motion has been pushed by out of touch senators that aren’t engaged in the day-to-day operations of the bitcoin industry and the wider developing blockchain ecosystem. These senators aren’t engaged or see the potential for future generations, rather acting out of fear of the unknown and scaremongering from short sighted senators.
Jack has reached out to the deliberating parties in an attempt to find some common ground that will benefit everyone involved.
Further Sam of FTX has given a great outline of what’s happening and the effects that it would have on exchanges and the industry. This is just 2 tweets of many that highlights that fact that the crypto community at large want a seat at the table and their voice to be heard when new legislation is implemented. Many are supportive of such regulation to assist and weed out any bad actors and fraud that makes it difficult for newcomers to trust the industry at large. Strong regulation in consultation with the industry leaders to get the right balance is the optimal outcome for all.
With such incredible sums flooding the global economies the option to hedge with a 401K in America or the bitcoin superannuation option look even more appealing due to the inflation that will follow such large quantities of stimulus.