A bipartisan bill introduced in the U.S. House of Representatives addresses the digital asset reporting provisions in the Infrastructure Investment and Jobs Act to provide more clarity to technology innovators and entrepreneurs.
The Keep Innovation in America Act (H.R.6006) makes several changes to the digital asset reporting requirements to make sure they match the technology’s operation. Specifically, it expands the definition of a “broker” to capture more digital asset entities for tax reporting that were not meant to be captured. This seeks to ensure that only those actually in the brokering business are required to report.
It also expands the definition of “cash” for reporting purposes to include “any digital asset,” requiring large transactions to be reported, raising privacy concerns. In addition, it delegates broad authority to the Department of Treasury to amend the definition of a “digital asset,” which will have long-lasting and potentially harmful implications.
“American innovation has reached an inflection point,” Rep. Patrick McHenry (R-NC), one of the bill’s sponsors, said. “On the one hand, we have the Infrastructure Investment and Jobs Act that President Biden signed into law on Monday. It includes digital asset reporting requirements that threaten to push innovators and entrepreneurs overseas. This would leave the U.S. as a passive observer of a rapidly evolving industry. On the other hand, we can fix these poorly constructed standards and ensure they are compatible with how this new technology actually works. The Keep Innovation in America Act will address these issues and provide additional clarity on the scope of these requirements. This would signal to innovators and entrepreneurs that we are committed to growing the next generation of the internet here at home.”
It is also sponsored by Reps. Tim Ryan (D-OH), Kevin Brady (R-TX), Ro Khanna (D-CA), Tom Emmer (R-MN), Eric Swalwell (D-CA), Warren Davidson (R-OH), Darren Soto (D-FL), Anthony Gonzalez (R-OH), Ted Budd (R-NC).
“Blockchains, cryptocurrencies, and decentralized finance may still be relatively new and evolving, but Congress must recognize that these technologies are some of the most important innovations to come along in a generation,” Ryan said. “We have to figure out how to balance consumer protections and reasonable oversight while simultaneously providing these technologies and companies with the necessary space they need to grow, innovate and democratize the financial sector. I’m committed to finding that balance, and I believe the McHenry-Ryan legislation is the best path to get us there. This legislation, in tandem with the Chinese Government’s recent ban of cryptocurrency transactions, gives us an opening to further enhance our nation’s role in the development of innovative blockchain technologies.”