Cryptocurrency record keeping and tax rules may become law
By Daniel Tyson
17:55, 23 August 2021
Interparty feuds and parliamentary rules may kill any chance that a last-minute Senate amendment favoured by the cryptocurrency industry could head to the president’s desk when the US House start debate on the infrastructure bill.
Earlier this month, the Senate failed to pass a last-minute amendment to limit increased government oversight and reporting regulations for cryptocurrency transactions. A 12th-hour agreement was reached but could not muster enough votes in the procedural process, sending the original version to the House.
The cryptocurrency industry contends the original version would be detrimental because it could lead to widespread imposition of taxation and record keeping rules, potentially snaring software developers and even retail investors.
There is hope within the industry the revised language will appear in the House’s version of the $1.2trn spending bill. The current bill is riddled with ambiguous language concerning regulations and taxation, the industry said.
House rules
However, two sources told Capital.com the future of the amendment is questionable. One Capitol Hill staffer said he gave inclusion of the amendment a less than 50-50 chance. He said the timeline of five weeks set by leadership – passage by 30 September – must include multiple hearings, debate and more amendments, which is tight for a massive spending bill.
Even if the deadline is met, Congressional rules could squash the industry’s wishes. “If the amendment is added, the language isn’t verbatim,” he said.
Under Congressional rules, before a bill heads to the president, both the House and Senate must vote on identical language. The legislative process for a bill to have mirror language is difficult and long. Negotiations between the chambers are held, then another vote by each body and then it goes to the president for a signature.
The staffer and a lobbyist, who both requested anonymity in order to speak freely, said they were unaware of efforts this early to include the cryptocurrency amendment.
House members “realise there are bigger issues in this bill than cryptocurrency,” the lobbyist said.
"We have a party that’s on the verge of imploding, that has a razor-thin majority and almost daily is seeing (possible) defectors," the lobbyist said about the Democrats. "Trust me, at this time in the process (speaker Nancy) Pelosi or (majority whip James] Clyburn aren’t asking about cryptocurrency.”
Feuding Democrats
Pelosi’s agenda isn’t sitting well with more progressive members of the Democratic party.
The speaker is seeking to schedule separate votes to advance the bipartisan infrastructure bill, a $3.5trn social safety net spending plan, along with a voting-rights bill, followed by a budget resolution. The progressive wing of the party wants to link the infrastructure bill and the safety net plan.
However, a group of nine more fiscally conservative Democrats have said they want an up or down vote on the infrastructure bill, hopefully sooner than later.
“We have the votes to pass this legislation right now, which is why I believe we should first vote immediately on the bipartisan infrastructure package, send it to the president’s desk, and then quickly consider the budget resolution, which I plan to support,” Rep. Josh Gottheimer (New Jersey), one of the nine Democrats, said in a statement on Friday.
“We need to get people to work and shovels in the ground,” he said.
Democrats have a slim majority in the House, of 220 seats versus 212 Republicans.
The lobbyist said that whether the infrastructure bill will pass or fail is too close to call. “We’ve seen Pelosi pull rabbits out of her hat before,” she said.
Reaction from analyst
Neeraj Agrawal, director of communications with Coin Center, told Capital.com it’s important to cultivate a healthy environment for cryptocurrency in America and it’s of growing geopolitical significance.
“We also have an activated community of cryptocurrency innovators and users all over the country who are ready to contact their elected officials. Indeed, they certainly made their voice heard in the Senate,” Agrawal said in an email.