Coinbase CEO Brian Armstrong has lauded U.S. lawmakers’ decision to revive a bill seeking to clarify crypto tax reporting.
Bill to streamline crypto asset reporting requirements
The Keep Innovation in America Act is a bipartisan bill introduced in March 2021 that Reps. Patrick McHenry and Ritchie Torres have revived to address digital asset reporting requirements.
According to the Coinbase CEO, the bill will clarify crypto tax reporting, muddled by president Joe Biden’s Infrastructure Investment and Jobs Act.
Biden’s act gave an overly broad definition of crypto asset brokers and provided “poorly constructed” reporting requirements for digital assets.
Its reporting requirements attempt to fit the existing cost-basis reporting framework for traditional financial markets to crypto assets without considering the difference between the two ecosystems.
McHenry and Torres’ newly revived bill comes against a backdrop of heightened regulatory scrutiny on cryptocurrency, threatening to push innovators and investors overseas.
Old laws impede innovation
The crypto-friendly legislators want to reintroduce the Keep Innovations in America Act because they believe that current reporting standards impede innovation in the crypto sector.
McHenry, chairman of the House Financial Services Committee, issued a stern warning earlier this week, saying the United States could either solidify its leadership position in the global financial system or let the new crop of innovations pass it by.
Coinbase’s Brian Armstrong has often spoken about the geopolitical benefits of embracing crypto.
According to him, by adopting cryptocurrency, the U.S. may modernize its financial system and cement its position as a global giant.
Armstrong believes that if the U.S. issued its dollar stablecoin on the blockchain, it would serve as the de facto digital currency for remittances and international currency transfers, ensuring the dollar remains the global reserve currency on and off the blockchain.
New bill exempts miners from IRS requirement
Per Americans for Tax Reform (ATR), if passed, McHenry’s bill will remove the requirement for cryptocurrency miners, validators, 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 exceeding $10,000 be disclosed to the IRS. Instead, the bill mandates the U.S. Treasury Department find ways of treating digital assets like fiat currency.
The Treasury Department previously stated that “ancillary parties” are not required to transmit transaction information to the IRS. Still, players in the industry feel a new leadership at the department might readily modify this position.
Therefore, ATR believes the only foolproof answer is to expressly codify that non-brokers are not required to submit transaction data to the IRS.