What crypto investors should know about the Senate infrastructure bill

To help fund the $ 1,000 billion bipartisan infrastructure bill, the Senate proposed a provision that would impose stricter rules on how “digital assets” are taxed.

In the latest version of the bill, released on Sunday, the provision would require crypto “brokers” to report specific information about crypto transactions, such as prices from when users bought and sold. This would be in addition to reporting transactions over $ 10,000 to the Internal Revenue Service (IRS), which is already mandated.

The definition of the provision of a “broker”, however, has raised concerns within the crypto community. Currently, the bill defines a “broker” as “any person who (for a fee) is responsible for regularly providing any service that transfers digital assets on behalf of another person”.

This, according to many within the crypto space, is too broad. A primary concern is that the current definition would target miners, developers, staking workers and others who do not have customers and therefore would not have access to the information necessary to comply.

As a result, lawmakers are working to clear up this confusion and are reportedly rewriting this provision to include a more specific definition. A spokesperson for Senator Rob Portman, R-Ohio, who drafted the bill, told the Washington Post that the legislation would not oblige non-brokers, such as software developers and crypto miners, to comply with IRS reporting obligations.

This is good news for everyday crypto investors. While the original definition would not have had a direct impact on investors, the language could previously have pushed crypto trading and overseas trading. This would have impacted the overall crypto market, indirectly affecting individual investors.

With the language overhaul of the provision by the Senate, crypto investors shouldn’t worry, Anjali Jariwala, certified financial planner, certified public accountant and founder of Fit Advisors, told CNBC Make It.

Jariwala reiterates that the crypto regulation in the Infrastructure Bill will primarily impact exchanges, not individual investors, miners or developers.

Moreover, this is only a first step for the regulation of crypto, she says. It is likely to spark clearer directions in the future.

When a law regarding tax reporting requirements is passed, the IRS then writes the law into the tax code. The IRS is supposed to interpret what Congress means and issue regulations accordingly, Jariwala says.

The provision of this bill is intended more to establish the intention of Congress than to set out specific rules. “This bill will likely be the first step in further regulation of cryptocurrency,” Jariwala said. If passed, lawmakers will discuss the regulation before it becomes law, she said.

Jariwala also says well-thought-out regulation would benefit the crypto industry in the United States

“I don’t see how an industry as big as crypto could continue to operate without any regulation or oversight,” she says. “If people want crypto to become more of a mainstream asset, then I think this is a necessary first step in the process of taking root in mainstream financial services.”

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