How cryptocurrency became a controversial part of the $1 trillion US infrastructure bill
Levying taxes on digital currency transactions would raise much-needed revenue to pay for the plan, but critics say it will have unintended consequences
A major bipartisan infrastructure bill in the US hit an unexpected hurdle when it ran afoul of the under-regulated and hyper-vocal cryptocurrency community.
The infrastructure bill, officially titled HR 3684, sets out a plan to spend $1 trillion to build roads and bridges, rehabilitate public transport and expand clean energy and vehicle electrification.
As politicians grappled with how to pay for it, a bipartisan provision emerged to levy taxes on digital currency transactions, raising about $28 billion in tax revenue over the next 10 years, the Washington Post reported.
Outside critics and a bipartisan coalition in the Senate voiced concern over how much of a hand government should have in the traditionally unregulated world of digital currencies, arguing that overreach may curb innovation.
The fresh debate was an unexpected hurdle on a long road to passing the Biden administration's infrastructure plan, touted as the path to economic recovery from the Covid-19 pandemic.
Those against the bill are honing in on one word in the tax provision, “broker”, and how it should be defined.
The proposal would impose new tax reporting obligations on cryptocurrency brokers, which enable traders to buy and sell cryptocurrency.
The bill identifies a “broker” as anyone “responsible for and regularly providing any service effectuating transfers of digital assets on behalf of another person”.
Under that definition, anyone identified as such would be subject to tax reporting requirements. This appears to include so-called miners who rely on a "proof of work" system by solving algorithms with computers and software that, if correct, verify and clear crypto transactions.
The decentralised nature of cryptocurrency and how transactions are recorded on a blockchain mean that these transactions are not so easily traced back to individuals. By design, cryptocurrency marketplaces do not easily allow for the collection and reporting of information on users.
Miners do not have customers, so they would not be able to have access to the information necessary to complete a 1099 tax form, required under the new provision, Tech Crunch reported.
A joint letter about the bill’s text was sent to Congress last week and it was signed by FinTech companies such as Square, Coinbase and Ribbit Capital. The letter declared that the proposal was akin to “financial surveillance” and would lead to unintended consequences for cryptocurrency miners and developers, Tech Crunch reported.
“We feel strongly that policies that [affect] people’s basic civil liberties and people’s rights in the digital age should never be tacked on to legislation like an infrastructure bill,” Evan Greer, director of Fight for the Future, told CNN.
Two amendments have been proposed to try to resolve the stalemate.
Senators Cynthia Lummis, a Republican from Wyoming, Ron Wyden, a Democrat from Oregon, and Pat Toomey, a Republican from Pennsylvania, proposed reinstating protections for individual investors, which would include miners, software designers and protocol developers, from being obligated to report data that would be impossible for them to collect.
A competing proposed amendment from senators Mark Warner, Democrat from Virginia, Rob Portman, Republican from Ohio, and Kyrsten Sinema Democrat from Arizona, which is also backed by the White House and Treasury Secretary Janet Yellen,would exempt traditional cryptocurrency miners who participate in time-consuming “proof of work” systems such as Bitcoin and ethereum from the financial reporting requirements outlined in the tax provisions.
Mr Portman said on Sunday during a Senate session that “cryptocurrency is a digital asset that more and more people are investing in. We should want that to continue, and continue in a healthy and sustainable way".
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
TOUCH RULES
Touch is derived from rugby league. Teams consist of up to 14 players with a maximum of six on the field at any time.
Teams can make as many substitutions as they want during the 40 minute matches.
Similar to rugby league, the attacking team has six attempts - or touches - before possession changes over.
A touch is any contact between the player with the ball and a defender, and must be with minimum force.
After a touch the player performs a “roll-ball” - similar to the play-the-ball in league - stepping over or rolling the ball between the feet.
At the roll-ball, the defenders have to retreat a minimum of five metres.
A touchdown is scored when an attacking player places the ball on or over the score-line.
The biog
Favourite hobby: I love to sing but I don’t get to sing as much nowadays sadly.
Favourite book: Anything by Sidney Sheldon.
Favourite movie: The Exorcist 2. It is a big thing in our family to sit around together and watch horror movies, I love watching them.
Favourite holiday destination: The favourite place I have been to is Florence, it is a beautiful city. My dream though has always been to visit Cyprus, I really want to go there.
Dr Afridi's warning signs of digital addiction
Spending an excessive amount of time on the phone.
Neglecting personal, social, or academic responsibilities.
Losing interest in other activities or hobbies that were once enjoyed.
Having withdrawal symptoms like feeling anxious, restless, or upset when the technology is not available.
Experiencing sleep disturbances or changes in sleep patterns.
What are the guidelines?
Under 18 months: Avoid screen time altogether, except for video chatting with family.
Aged 18-24 months: If screens are introduced, it should be high-quality content watched with a caregiver to help the child understand what they are seeing.
Aged 2-5 years: Limit to one-hour per day of high-quality programming, with co-viewing whenever possible.
Aged 6-12 years: Set consistent limits on screen time to ensure it does not interfere with sleep, physical activity, or social interactions.
Teenagers: Encourage a balanced approach – screens should not replace sleep, exercise, or face-to-face socialisation.
Source: American Paediatric Association
Milestones on the road to union
1970
October 26: Bahrain withdraws from a proposal to create a federation of nine with the seven Trucial States and Qatar.
December: Ahmed Al Suwaidi visits New York to discuss potential UN membership.
1971
March 1: Alex Douglas Hume, Conservative foreign secretary confirms that Britain will leave the Gulf and “strongly supports” the creation of a Union of Arab Emirates.
July 12: Historic meeting at which Sheikh Zayed and Sheikh Rashid make a binding agreement to create what will become the UAE.
July 18: It is announced that the UAE will be formed from six emirates, with a proposed constitution signed. RAK is not yet part of the agreement.
August 6: The fifth anniversary of Sheikh Zayed becoming Ruler of Abu Dhabi, with official celebrations deferred until later in the year.
August 15: Bahrain becomes independent.
September 3: Qatar becomes independent.
November 23-25: Meeting with Sheikh Zayed and Sheikh Rashid and senior British officials to fix December 2 as date of creation of the UAE.
November 29: At 5.30pm Iranian forces seize the Greater and Lesser Tunbs by force.
November 30: Despite a power sharing agreement, Tehran takes full control of Abu Musa.
November 31: UK officials visit all six participating Emirates to formally end the Trucial States treaties
December 2: 11am, Dubai. New Supreme Council formally elects Sheikh Zayed as President. Treaty of Friendship signed with the UK. 11.30am. Flag raising ceremony at Union House and Al Manhal Palace in Abu Dhabi witnessed by Sheikh Khalifa, then Crown Prince of Abu Dhabi.
December 6: Arab League formally admits the UAE. The first British Ambassador presents his credentials to Sheikh Zayed.
December 9: UAE joins the United Nations.
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Tree of Hell
Starring: Raed Zeno, Hadi Awada, Dr Mohammad Abdalla
