(Note: Orin Hatch retired in 2019)
The average age of Senators in the current Senate is 62.9 years. Are these Senators too old to understand crypto? This question was raised in light of the sudden announcement of a crypto provision that was tacked on to the infrastructure bill in the Senate at the last moment.
Some Republicans supported the move due to their concerns over the cost of the bill. It was thought that additional income could be raised by a broad tax on the crypto industry, even though it may actually prove to be illegal. This knee-jerk addition to the bill at the last moment was immediately and strongly opposed by the cryptocurrency industry. They would like to be regarded in a similar fashion as commodities, especially since there is no profit until cryptocurrency is sold. If tax reporting were required of miners, developers, and stakers, none of these groups have access to customer data, which could make the provision ultimately unenforceable.
There are two versions of the additional provision that have yet to be voted on, and it remains to be seen which version will make it into law. One version might be acceptable to the cryptocurrency industry, but one is very strongly opposed by the industry. The second version has galvanized organized opposition in very short order. Obviously, the House still has to vote on this bill and the House is not currently in session. They are not scheduled to return until September 14th unless the President calls them back earlier.
The version that attempts to tax PoS software developers or "proof of stake" is strongly opposed by the cryptocurrency industry, and may prove unenforceable in the long run. The question of whether the Senators have the ability to understand and process the differences between these two versions is a valid question. Sooner or later, the cryptocurrency industry will have to face some level of regulation. This has been known for quite some time. It remains to be seen if the Senators will side with Biden on strict new tax and regulation on the industry, or if they will adopt more reasonable standards acceptable to the cryptocurrency industry.
One legitimate fear is that any excessive regulation will drive the nascent cryptocurrency industry offshore and that the US will lose all benefits from this industry that has a huge potential to contribute to the US economy directly as well as indirectly. The loss of this entire industry would certainly be a severe blow to the US economy in the long term.
Post was written by John Lombaerde – a Markethive contributor and entrepreneur