A provision in an infrastructure bill being debated by the U.S. Senate has prompted concerns in the crypto industry as it boosts Internal Revenue Service reporting requirements for investors and brokers.
Fast facts
- According to the New York Times, the provision is an effort to help fund a US$ 1 trillion bipartisan bill and could help raise US$28 billion over a decade, according to an estimate by the Joint Committee on Taxation.
- Many in the crypto industry were initially concerned over the bill’s broad definition of “broker,” to incude any party facilitating transfers of digital assets. However, an updated version of the bill released late Sunday night narrowed that definition to “any person who (for consideration) is responsible for regularly providing any service effectuating transfers of digital assets on behalf of another person.”
- The provision comes amid increasing regulatory scrutiny of the industry in the U.S. Securities and Exchange Commission Chair Gary Gensler recently said stablecoins could be subject to the securities laws that govern their underwriting assets. That sentiment mirrored those of Treasury Secretary Janet Yellen, who just a few days earlier said the country needed to “to act quickly to ensure there is an appropriate U.S. regulatory framework in place” for stablecoins.
- At a recent Senate Banking Committee hearing, Chairman Sherrod Brown took a hard line against crypto and the narrative surrounding it, saying: “There’s nothing democratic or transparent about a shady, diffuse network of online funny money.”
- Speaking at the same hearing, Elizabeth Warren, who heads the Senate Banking Committee’s Subcommittee on Economic Policy, said: “Instead of leaving our financial system at the whims of giant banks, crypto puts the system at the whims of some shadowy, faceless group of super-coders and miners, which doesn’t sound better to me.” The Massachusetts senator also recently called on Gensler to advise on regulatory framework for cryptocurrency, asking for a reply by July 28, although she has yet to receive one.