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- The debate also helped some see the beneficial effects Blockchain technology
- Taxation on Cryptocurrency stays intact
- No change in the definition of a broker, which is vague and could include miners and validators also
It was an eventful week, if not staggering as a crypto analyst called it. The week saw U.S. Senators Ted Cruz and Senator Ron Wyden trying their best on behalf of the cryptocurrency and Blockchain industry but in vain.
The way for future regulation of Cryptocurrency is likely though it may not seem that way now.
The Biden Administration’s $1.2 trillion infrastructure bill was to give a fillip to the post-pandemic economy. It was majorly about roads and bridges, but as the Senate vote approached, it also became about cryptocurrency taxation.
The provisions were added at the last minute and crypto advocates warned that it could have dire consequences. The move also leads to Bitcoin miners leaving the USA and would thwart future blockchain development.
Venture capital firm Andreessen Horowitz warned that it would be the most significant loss for America, and the nation’s image as the innovation epicenter of the world will be badly dented.
Hopes of a compromise dashed.
Any last-moment compromise between the senators of both the parties participating in the debate is now over since any changes in the bill would require unanimous consent on the Senate floor. Alabama’s Richard Shelby scotched the effort, reportedly because it didn’t include his amendment for $50 billion in military spending. However, the matter was entirely unrelated to crypto taxation.
The bill thus cleared the Senate with most of the provisions to generate $28 billion in tax revenues from crypto transactions largely intact. The definition of “brokers” subject to reporting regulations is also unchanged and deemed so broad that it could (potentially) include crypto miners, software developers, node validators, and even those creating non fungible tokens or NFTs.
All is not lost
The legislation is now set to move to the U.S. House of Representatives, with its priorities and modifications. Since the legislation will take another two and a half years for full implementation, there are numerous possibilities.
Many see the silver lining in the week’s turbulent events, and there might even be some long-term advantages for the crypto sector.
Peter Hans, managing director at digital asset management firm Arca, told leading crypto weekly that the developments have been largely positive, and the cryptocurrency sector is on the radar of Congress.
Therefore they will be better acquainted with the intricacies of Cryptocurrency, much beyond the usual narrative of energy efficiency and ransomware payments.
Andrew is a blockchain developer who developed his interest in cryptocurrencies while pursuing his post-graduation major in blockchain development. He is a keen observer of details and shares his passion for writing, along with coding. His backend knowledge about blockchain helps him give a unique perspective to his writing skills, and a reliable craft at explaining the concepts such as blockchain programming, languages and token minting. He also frequently shares technical details and performance indicators of ICOs and IDOs.
