Last week, China banned cryptocurrencies, both trading and mining. Although the same is not expected to happen with the United States, a series of measures are expected that could lead to a tightening of transactions.
The concern is based on the fact that the White House has nominated Saule Omarova to head the Office of the Supervisor of the Currency, a well-known critic of cryptocurrencies, which joins other government positions with similar thoughts.
Just yesterday Ellon Musk stated, “It is not possible, I believe, to destroy ‘cryptos,’ but it is possible for governments to slow their advance.”
Michael Hsu, the acting director while Omarova’s nomination is being resolved, has already warned stating that he believes virtual currencies could be “as dangerous as the complex derivatives” that triggered the 2008 financial crisis.
On the other hand, Securities and Exchange Commission Chairman Gary Gensler stated that the cryptocurrency market is “rife with fraud, scams and abuse.”
Gensler wants cryptocurrencies to be regulated just like securities, something unthinkable for the decentralized nature of cryptoassets.
On most platforms customers have to go through an intermediate coin or “stablecoin” before accessing any cryptocurrency and the most commonly used for this is tether.
Therefore, new rules would also be in the works for tether, whose value is tied to the dollar arbitrarily. “These stable coins are acting almost like poker chips in the casino right now,” Gensler said.
The U.S. project
Last August 10, the United States passed a lengthy infrastructure bill of more than 2,500-plus pages includes a provision that envisions imposing stricter rules on investors in the digital currency market with the aim of raising u$s28 billion through taxes on crypto transactions.
To that end, the bill seeks to deepen tax reporting requirements on cryptocurrency movements with an expansion of the term “broker” or “intermediary“, in English ‘broker.’ As such, the bill would require a large number of entities, including miners, wallet developers, node operators and others, to report cryptocurrency transactions.
Experts and community leaders have highlighted that the current language of the proposed law is a problem, as the measure would be impossible to comply with by many of these entities that do not facilitate direct transactions to customers.
Node brokers, for example, are unable to collect the necessary user information for every cryptocurrency transaction they validate.
In August, a group of cryptocurrency industry players banded together to amend the provision by shortening the scope of the term “broker.”
However, and despite the joint effort of the senators, the draft bill passed unchanged to the House of Representatives after failing to get a unanimous decision for the provision amendment in the Senate.
The most recent reports on the bill did not indicate whether House members will discuss a change for the controversial cryptocurrency provision.
Last month, a report suggested that the Treasury Department planned to clarify the definition of “broker.” According to a Bloomberg report, an unnamed Treasury official indicated that the department will stick to the definition of “broker” set forth in the Internal Revenue Code (IRC), and will not target entities that are not governed by it.
Currently, the infrastructure bill faces opposition from some lawmakers who believe it should be delayed until negotiations have been completed with respect to the follow-on u$s3.5 trillion social welfare and climate bill.
With the addition of the second bill unsettling some Democrats, Pelosi said it is “clear” that the bill could be reduced in scope. “We are now working together with the Senate and the White House on changes to this historic legislation,” the official stressed.