- New law is possible solution to issues with the Infrastructure Investment and Jobs Act
- Innovation in the crypto sector is hampered by the old laws
US legislators have revived a tax bill intended to streamline crypto asset reporting. Their decision has been lauded by leading industry figures such as Coinbase CEO Brian Armstrong, who has been vocal about lack of regulatory clarity in the past.
The Keep Innovation in America Act was initially introduced as a bipartisan bill two years ago. Armstrong tweeted that it would make crypto tax reporting clearer.
It is also a possible “solution to the Infrastructure Investment and Jobs Act’s poorly constructed digital asset reporting requirements.” This act, which was introduced by US President Joe Biden, defined crypto asset brokers too broadly.
Current standards “impede innovation”
The purpose of the Keep Innovations in America Act is to ensure continued innovation in the crypto sector, which is hampered by the old laws. The new reporting requirements would adapt to the current cost-basis ecosystem of reporting for conventional financial markets. Crypto assets do not fit this ecosystem.
According to Armstrong, who has repeatedly talked about the geopolitical benefits of adopting crypto, the US could restore its position as a world leader in finance and modernize its financial system. Issuing a USD stablecoin would enable international currency transfers and a digital currency for remittances. It would make sure the leading fiat currency remains that of the global reserve both on and off the blockchain.
Miners would be exempt from reporting transactions
If the bill is passed into law, crypto miners, software developers, and validators will no longer have to provide the IRS with transaction details. In addition, it will do away with the requirement to disclose any transactions exceeding $10,000 to the IRS. The new law would require the US Treasury Department to find ways to treat crypto the same way as fiat.
Earlier, the Treasury stated that “auxiliary parties” did not have to give the IRS transaction information. Insiders believe this is liable to change, so the only real solution is to explicitly state that entities who aren’t crypto brokers don’t have to give the IRS transaction details.
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