August 1, 2021 @ 8:19 pm By JD Alois
The US Senate worked on Sunday to come to terms on a infrastructure bill that could end up costing trillions of dollars. The super thin margin in the Senate means moderates on both sides of the aisle will play a key role in the decision making as to how the legislation eventually sorts out. Most recent reports expect an agreement in principle at some point this week.
But buried within a current version of the legislation is language that is worrying the blockchain sector of Fintech. In a public statement on Friday, the Blockchain Association, a national representative group backed by some of the biggest names in the digital asses sector, joined with 12 regional blockchain associations to call on Congress to not put this nascent industry at risk as “thousands” of blockchain-based jobs “could be lost if this provision is signed into law.”
The group states that one portion of the bill is concerning – a provision entitled “Enhancement of Information Reporting for Brokers and Digital Assets.” Industry advocates believe the current language will be detrimental to firms operating in the blockchain sector and may send jobs outside the country while “strike[ing] at the heart of innovation.” The group states that digital asset firms currently have no way to comply with the language of the bill.
It is interesting to note that when the White House made the announcement that a deal was near in a new spending bill that includes infrastructure policymakers are targeting crypto traders as one method to help pay for the massive spending.
The letter posted the Blockchain Association and regional groups is republished below.
To Whom it May Concern:
As a collective body of State Associations representing and promoting the blockchain industries of 12 states and territories, we are thankful for the much anticipated Bipartisan Infrastructure Bill currently being presented before Congress. We greatly appreciate the tireless work that our Senators have put in to provide much-needed relief to the businesses and industries within our states.
One provision within the Infrastructure bill, however, poses an imminent threat to the budding crypto industry here in America. We stand with the Blockchain Association in our belief that the provision entitled “Enhancement of Information Reporting for Brokers and Digital Assets” will serve as a major hindrance to small innovators and the crypto ecosystem at large, risk driving jobs overseas, and strike at the heart of innovation.
Our State Associations are eager to see guidance for traditional cryptocurrency exchanges to report to the IRS, but as currently drafted, the language under consideration would burden individuals and other entities that don’t have access to the information required for this particular type of reporting. What Congress is considering with this measure is not a new tax on the cryptocurrency industry. Instead, it puts new reporting requirements on individual players in the industry who have no way to comply.
These individuals will be faced with impossible-to-fulfill reporting requirements that could thwart critical investments in our economy and communities within our states. Smaller tech companies will inevitably begin to move overseas in order to avoid these unfeasible reporting requirements and continue operating. Such a move will only cede American leadership in the crypto space to our international competitors and undermine potential job growth in our states. Meanwhile, these relocations will prevent Congress from seeing much of the $28 billion they project to bring in.
Instead of rushing through an untested provision with vast unintended consequences, we encourage Congress to work with our collection of State Associations to find language that works for all stakeholders, keeping America at the forefront of crypto innovation.
Cascadia Blockchain Council
California Blockchain Advocacy Coalition
ETHDenver and Colorado Blockchain
Florida Blockchain Business Association
Minnesota Blockchain Initiative
New Jersey Blockchain Council
North Carolina Blockchain Initiative
Pennsylvania Blockchain Coalition
Puerto Rico Blockchain Trade Association
South Carolina Emerging Tech Association
Dr. Gordon Jones
William H. Kleindienst
Texas Blockchain Council
Wyoming Blockchain Coalition