US senators are calling for cryptocurrency transactions to be taxed, in a bid to help pump $28 billion into America’s coffers.
A proposed bill in the Senate’s bipartisan infrastructure deal voted through in the early hours included the surprise addition of measures to milk revenue from crypto.
The bill now goes to a full Senate vote before being handed to the House of Representatives to be passed into law.
If it gets the nod in Washington, the ripple effect of cryptocurrency taxation in the US could have far reaching implications across the globe for digital assets.
Capitol Hill had been the backdrop to weeks of meticulous and often painstaking discussions under the spotlight of US President Joe Biden’s longing for cross-party cooperation.
The landmark legislative barrier was finally hurdled a few hours ago – but only after the notion of taxing crypto was thrown into the ring late on.
Massive program of investment
The infrastructure spending bill has been stamped as an urgent priority by the Biden administration as it attempts to sweep in a massive program of investment to steer the US economy away from potential financial problems.
“This deal signals to the world that our democracy can function, deliver, and do big things,” Biden said ahead of the vote.
“As we did with the transcontinental railroad and the interstate highway, we will once again transform America and propel us into the future.”
What hadn’t been expected before the debate began, was the inclusion of legislation measures relating to cryptocurrencies.
Ohio’s Republican Senator Rob Portman set the wheels in motion after saying Congress had raised concerns over taxation requirements for cryptocurrency reporting.
“Everybody’s been talking about the appropriate way to provide more reporting in particular and that leads to better compliance,” he said.
The proposals are now focused on clamping down on reporting requirements for brokers as well as tightening regulations on how businesses handle cryptocurrency. The final bill could now demand that transactions in excess of $10,000 are to be reported to Internal Revenue Service (IRS).
It is anticipated the crypto industry will rail against the proposals – the US Blockchain Association has already labelled the proposal as “hugely problematic” and vowed to push for the bill’s surprise additions to be changed.
However, the bill was strongly backed, winning the vote by 67 to 32 – an ominous sign that the cryptocurrency community will have a serious fight on its hands to overturn a groundswell of momentum towards strengthening tax enforcement.
The eyes of the world will be watching the next two votes closely as governments tune in to how much cash the US can raise from crypto tax.