Today Senators Pat Toomey (R-PA) and Cynthia Lummis (R-WY) spoke about the $1.2 trillion bipartisan infrastructure bill currently being considered by the Senate.
To begin, Senator Toomey introduced a much-debated amendment to the bill. He noted the general agreement among senators and the bitcoin community that centralized digital exchanges acting as brokers should be required to report transactions to the IRS just like other kinds of brokers. The case for the amendment is that the language of the current text of the infrastructure bill is flawed.
Toomey began by introducing the need for the amendment: “The current text would ensnare people and companies and impose transaction reporting requirements on those to whom it should not apply, and in some cases to those who couldn’t possibly even attain the information. For example, crypto transaction validators, and people who write software code who have no further involvement with its application.”
He went on to mention the co-sponsors to the amendment were Senators Lummis, Warner (D-VA), Portman (R-OH), and Sinema (D-AZ). Toomey said, “We came together to provide greater clarity on the rules for who are the actual brokers of a cryptocurrency. We’re not proposing anything sweeping or anything radical.”
This afternoon Senator Rob Portman tweeted regarding the recent amendment proposal, commenting that he was pleased that the senators came together to “clarify IRS reporting rules for crypto transactions w/o curbing innovation or imposing information reporting requirements on stakers, miners, or other non-brokers.”
Toomey continued, “Our solution makes clear that a broker means only those persons who conduct transactions on exchanges where consumers buy, sell and trade digital assets. It ensures that the bill does not sweep in software developers, crypto transaction validators, node operators, or other non-brokers.”
The senator went on to emphasize that actual crypto brokers and people with tax obligations should report and fulfil them. He noted that while many involved, especially the bitcoin community, do not find this amendment to be the perfect solution, it is an important improvement on the underlying infrastructure text.
Toomey concluded by predicting that a year from now things may indeed look very different, however, that’s no reason to hastily pass reporting requirements on those who can’t possibly comply, or to stifle the budding innovation that is yet to come in the Bitcoin space.
Senator Lummis also spoke today regarding the proposed amendment. Noting, “it’s been a long process with a lot of back and forth.”
Senator Lummis took a moment to thank Senator Wyden (D-OR), who has not co-signed the amendment but was integral in contributing to its construction and pushing the senators to go further to protect the interests of technology innovators.
“The innovation is moving at such a rapid rate that we probably will have to revisit a lot of these subjects within the next twelve months,” Lummis commented. However, she noted that the purpose of the amendment was to put out some legislation to “set some definitions in this space.” Clarifying language is an important step to lay the groundwork for a strategic, pro-bitcoin path forward in congress.
“We can’t afford to get this wrong,” she said.
Lummis highlighted the need to encourage obligated parties to pay taxes in a way that avoids stifling innovation. Despite China having banned bitcoin mining Lummis commented that “China and other countries are way way ahead of us in the digital asset space.”
The senator pointed out that before the debate of the amendment to the infrastructure bill the public was generally unaware of a few senators who were seriously interested in the regulation of cryptocurrencies such as Bitcoin.
The senator also noted how constructive the positive and respectful input on the amendment from the Bitcoin community was.
After the press conference Twitter CEO Jack Dorsey weighed in with a tweet: “Critical we protect lightning and other scalability solutions for Bitcoin. Routers or node operators aren’t brokers.” Jack went on to thank the senators involved in the construction of the amendment.
During the Q&A Senator Toomey commented on the power of bitcoin distributed ledger technology, saying that “the fact that a mechanism has been invented to validate transactions without a trusted intermediary, to do it through a distributed ledger mechanism is going to change whole industries I think.”
He concluded, “It’s going to be too powerful to stop. It would be a very bad idea to try to stop.”