US senators pitch more targeted crypto measure in infrastructure

US lawmakers pushed for an alternative cryptocurrency taxation plan that would take a more targeted approach, leaving out those developing blockchain technology and wallets. — Getty Images/AFP

A bipartisan group of lawmakers released an alternative cryptocurrency revenue-raising plan that could replace a current section in the infrastructure bill now under consideration in the US Senate.

The amendment, filed by Senate Finance Committee Chairman Ron Wyden and Republican Senators Pat Toomey and Cynthia Lummis, offers a more targeted approach to requiring cryptocurrency exchanges and other virtual currency entities to report information to the Internal Revenue Service. It would need to garner at least 60 votes in the Senate.

The amendment would target the proposed information-gathering from crypto brokers to affect "only those persons who conduct transactions on exchanges where consumers buy, sell and trade digital assets,” the text showed. This would leave out those mining or staking, or selling hardware or software, the proposal showed.

The current version of the US$550 bil (RM2.32tril) infrastructure legislation has been criticised by cryptocurrency investors and Twitter Inc. chief executive office Jack Dorsey for being overly broad and requiring some crypto-related businesses – like miners or software developers – to report to tax collectors data that they don’t have access to.

"Investors failing to pay tax they owe through cryptocurrency is a real problem, and I strongly support third-party reporting by exchanges where cryptocurrency is bought, sold and traded,” Wyden said in a statement. "Our amendment makes clear that reporting does not apply to individuals developing blockchain technology and wallets.”

‘Responsible Step’

Lummis, a vocal advocate for virtual currencies, said in a statement that digital assets are here to stay and called the amendment a "responsible step” toward incorporating them into the financial sector without stifling innovation.

"It’s very important that we respect the privacy and non-government involvement in non-fiat currency and still allow the innovation so that it can intersect with a traditional fiat economy,” she said Wednesday in an interview on Bloomberg TV. A fiat currency is a term for one – such as the dollar – that’s not backed by an asset, such as gold, but instead relies on faith and credit of the issuer.

The current measure is projected to raise US$28bil (RM118.29bil), helping offset a portion of the bill’s price tag. An estimate of the new plan’s revenue-raising prospects was not immediately available.

The Senate is voting on amendments to the infrastructure bill this week, and a final vote could come as soon as this weekend. The crypto amendment has not yet been scheduled for a vote. Meantime, the House does not have plans to immediately take up the bipartisan Senate bill. – Bloomberg

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