On Thursday, a group of bipartisan lawmakers introduced a law to preserve innovation in America. The bill aims to amend the definition of "crypto broker" in the law on investments in infrastructure and jobs, signed earlier this year. The new law is also aimed at amending the tax code, as well as transactions between brokers and non-brokers.
Patrick McHenry, a member of the House Financial Services Committee, said that, on the one hand, there is already a law on investments in infrastructure and jobs, which US President Biden signed on Monday. It includes reporting requirements on digital assets that threaten to drive innovators and entrepreneurs abroad. This will leave the US a passive observer of the rapidly developing industry. On the other hand, it is possible to fix these poorly constructed standards and make sure they are compatible with how this new technology actually works.
The infrastructure bill contains a provision that expands the definition of a broker for the purposes of crypto-tax reporting. The new definition could generate about $30 billion in revenue over the next decade, but could also hurt wallet manufacturers or software developers who fail to comply with tax reporting requirements. Another provision that worried cryptocurrency investors were the new requirement to preserve the receipt and sender's information, which could be considered a curse for the privacy-oriented cryptocurrency space.
America's Preservation of Innovation Act will change both of these factors, which is good news for funds dealing with digital infrastructures, such as the VanEck Digital Transformation ETF (DAPP). Reporting requirements and taxation could complicate the situation for a number of DAP holdings, including wallet providers, software and hardware companies that make up the digital infrastructure of the cryptocurrency space.
The bill has become widely supported by the cryptocurrency industry. After it was presented on Thursday, Coin Center, Blockchain Association, Crypto Council for Innovation, Electronic Frontier Foundation and others published statements in support of the bill.
