Senators Update Infrastructure Agreements to Incorporate Cryptocurrency Taxes, Creating an Additional $28 Billion in Revenue
United States Legislators believe they can raise $28 billion in infrastructure investment by increasing the tax on cryptocurrency transactions.
Legislators proposed extended bitcoin taxation as a last-minute addition to the bipartisan infrastructure in the United States Senate, raising an additional $28 billion in income.
The proposal will tighten regulations on organizations that deal in cryptocurrency, enhance reporting requirements for brokers and require the Internal Revenue Service to report digital asset transactions worth more than $10,000.
Senator Rob Portman of Ohio, the Republican who is leading the infrastructure discussions, highlighted that Congress has previously expressed worries about cryptocurrency reporting and taxation requirements:
“Everybody’s been talking about the appropriate way to provide more reporting in particular and that leads to better compliance.”
Following weeks of back and forth between Republicans and Democrats, the crypto provisions were added on July 28. The new crypto tariffs will be used to partially fund a $550 billion infrastructure investment in transportation and electricity.
The digital asset industry has already reacted negatively to the idea, with Blockchain Association executive director, Kristin Smith, stating that many enterprises exposed to the proposed laws cannot collect the essential data.
“We’re pushing every lever right now to change it,” she said, describing the proposed measures as “hugely problematic.”
What will happen next?
The suggestion comes as US regulators tighten their grip on digital assets. On July 27, Acting Comptroller of the Currency Michael Hsu disclosed that officials are looking into the commercial paper reserves backing Tether (USDT), the main stable coin.
For nearly half a decade, Tether has been criticized for its hidden reserves and failing to deliver on promised audits. In May, the corporation provided a breakdown of its funds, revealing that USDT is backed by commercial paper to the tune of 49.6%.
On the same day, law professor Angela Walch argued for increased oversight of the mining sector during a hearing before the United States Senate Committee on Banking, Housing, and Urban Affairs.
Walch cited miners’ capacity to command blockchain transactions and siphon Miner Extractable Value (MEV) as important vulnerabilities that have escaped from lawmakers.
On July 19, during a President’s Working Group meeting on Financial Markets, US Treasury Secretary Janet Yellen pushed for tighter regulation of stable coins and stable token producers. The organization anticipates issuing draught stable coin legislation within the next several months.