Senators add crypto taxes to infrastructure deal to raise $28B in extra revenue
U.S. lawmakers believe they can find $28 billion worth of infrastructure funding by expanding taxation on crypto transactions.
The proposal will implement tighter rules on businesses handling crypto, expand reporting requirements for brokers and mandate that digital asset transactions worth more than $10,000 are reported to the Internal Revenue Service.
The crypto measures were hastily added to the deal on July 28, following weeks of back and forth between the Republicans and Democrats. Revenue from the new crypto taxes will be used to partially fund a $550 billion investment into transportation and electricity infrastructure.
The digital asset industry is already pushing back against the proposal, with Blockchain Association executive director, Kristin Smith, arguing that many of the firms that would be subjected to the new rules lack the capacity to collect the required information.
The proposal comes as crypto assets are coming under increasing regulatory scrutiny in the United States.
On July 27, Acting Comptroller of the Currency, Michael Hsu, revealed that regulators are investigating the commercial paper reserves backing leading stablecoin, Tether (USDT).
Tether has faced criticism for its opaque reserves and failure to deliver promised audits for roughly half a decade. In May the firm disclosed a breakdown of its reserves that states USDT is 49.6% backed by “commercial paper.”
During a hearing on cryptocurrency before the U.S. Senate Committee on Banking, Housing and Urban Affairs held on the same day, law professor Angela Walch also called for greater oversight of the mining sector.
Walch highlighted the ability for miners to order blockchain transactions and siphon Miner Extractable Value (MEV) as significant issues failing to make it onto the radar of lawmakers.