Sen. Cynthia Lummis (R-WY) and Sen. Ron Wyden (D-OR) have introduced a legal proposal that protects the United States cryptocurrency industry by improving certain key concepts in the newly approved controversial Infrastructure Bill.
The joint proposal appeared a few days after the United States President Joe Biden signed the Infrastructure Bill into law, which is now almost ready for implementation.
Among key concepts attracting a heated discussion is the term “broker” for digital assets. In this case, the Lummis-Wyden bill is significant since it will give a legal definition of the concept of “broker.”
As it is now, the infrastructure bill excludes cryptocurrency miners, stakers, developers, wallet, and custodial:
“Bill will revise the rules of construction applicable to information reporting requirements imposed on brokers with respect to digital assets, and for other purposes.”
Based on the current structure of the Infrastructure law, providers of the aforementioned services are required to provide private information of their users to the regulatory authority. Unfortunately, some providers and non-custodial wallet providers or decentralized finance (DeFi) developers cannot provide such information.
In that context, many experts have asserted that the Infrastructure Act in its current state would undermine the free development of the US crypto industry.
The Lummis-Wyden bill will be a great victory for the cryptocurrency industry at large upon approval.
Both Senator Lummis and Wyden have confirmed goodwill for the future of the crypto industry. In a November15 press release, Senator Lummis explained that the joint effort was to protect the innovation and development of the crypto ecosystem:
“With the infrastructure bill on the verge of becoming law, it’s critically important to protect innovation in the digital asset space. Our bill makes clear that the new reporting requirements do not apply to individuals developing blockchain technology and wallets.”
Lummis has insisted that the proposed bill seeks to make sure that crypto traders pay capital gains taxes only.
Importance of Lummis-Wyden Bill
Earlier this month, the report confirmed that the Infrastructure Bill of 2021 had passed with 226 favorable votes vs. 206 opposing votes. Upon implementation, the new law would force crypto traders to file 1099 forms with the IRS.
Moreover, American crypto businesses would also be required to provide vital information for their customers, including personal ID, addresses, etc.
Cynthia Lummis, a renowned Bitcoiner and critic of the Infrastructure Bill, repeatedly advocated for an amendment of the text during senate proceedings, but her efforts ended unsuccessfully.
Nonetheless, the new proposal would make the infrastructure bill more crypto-friendly without attracting much political wrangling that may attack President Joe Biden’s most ambitious proposal at the moment.