Coinbase CEO Praises Resurgence of Crypto Tax Legislation
Coinbase CEO Brian Armstrong has praised US lawmakers’ decision to revive a bill that seeks to clarify cryptocurrency tax reporting.
Invoice to simplify reporting requirements for crypto assets
The Keep Innovation in America Act is a bipartisan bill introduced in March 2021 that Reps. Patrick McHenry and Richie Torres revived to meet digital asset reporting requirements.
According to the Coinbase CEO, the bill will clarify cryptocurrency tax reporting, which has been obfuscated by President Joe Biden’s Investment in Infrastructure and Jobs Act.
The Biden Act gave an overly broad definition of crypto-asset intermediaries and introduced “poorly designed” reporting requirements for digital assets.
Its reporting requirements attempt to fit within the cost-based reporting framework of traditional financial markets for crypto assets without considering the difference between the two ecosystems.
McHenry and Torres’ newly revived bill comes against a backdrop of mounting regulatory scrutiny on cryptocurrency, threatening to drive innovators and investors out.
Outdated laws hinder innovation
Crypto-friendly lawmakers want to reintroduce the Keep Innovations in America Act because they believe current reporting standards are hindering innovation in the crypto sector.
McHenry, chairman of the House Financial Services Committee, issued a stern warning earlier this week, saying the United States can either strengthen its leadership position in the global financial system or let the new set of innovations pass it by.
Coinbase’s Brian Armstrong has talked a lot about the geopolitical benefits of embracing cryptocurrencies.
According to him, by adopting cryptocurrency, the United States may modernize its financial system and strengthen its position as a global giant.
Armstrong believes that if the United States issues its own dollar stablecoin on the blockchain, it will serve as the de facto digital currency for international remittances and currency transfers, ensuring that the dollar will remain a global reserve currency both on and off the blockchain.
A new bill exempts miners from IRS requirements
According to Americans for Tax Reform (ATR), if passed, McHenry’s bill would remove requirements for cryptocurrency miners, auditors, and software developers to submit transaction information to the Internal Revenue Service (IRS).
According to the organization, another section of the bill will also eliminate the requirement that crypto transactions over $10,000 be disclosed to the IRS. Instead, the bill requires the US Treasury to find ways to treat digital assets like fiat currencies.
The Treasury previously stated that “helping parties” are under no obligation to transfer transaction information to the IRS. However, industry players feel that the new leadership in the division may easily amend this situation.
Therefore, ATR believes the only foolproof answer is to write explicitly that non-brokers are not required to provide transaction data to the IRS.
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