A contentious crypto law had a last-minute compromise added to it. The ongoing drama over a proposed law that may roil the crypto industry took another twist on Monday morning when key Senators said they had reached a new bipartisan agreement “to fix the digital asset reporting requirements in the infrastructure bill.”
Lummis and Toomey have taken the lead in fighting to get rid of a piece of the bill that may consider many different types of crypto companies—such as developers, wallets, and exchanges—as “financial intermediaries” for tax reporting reasons.
I'm pleased to announce that Senators Warner, Toomey, Sinema, Lummis & I have reached an agreement on an amendment to clarify IRS reporting rules for crypto transactions w/o curbing innovation or imposing information reporting requirements on stakers, miners, or other non-brokers
— Rob Portman (@senrobportman) August 9, 2021
Lummis and Toomey were close to passing a change to the legislation that would assuage the concerns of the crypto industry’s brokers. There was also another Senate proposal filed that would have granted an exception to just proof-of-work projects, and this legislation ground to a halt over the weekend due to disputes about the meaning of the exemption.
It’s possible that Monday’s statement reflects a last-minute compromise, but we won’t know for sure until the Senate gets around to voting on it. A cloture motion was successfully proposed on Sunday, putting an end to the discussion on the broader $1 trillion infrastructure package. However, any modifications must be made unanimously before a final vote on Tuesday.
Sen. Ron Wyden (D-OR) was optimistic about a unanimous vote.
We’ve been working hard to get a deal. I don’t believe the cryptocurrency amendment language on offer is good enough to protect privacy and security, but it’s certainly better than the underlying bill. Majority Leader Schumer says he won’t block a unanimous consent request on it
— Ron Wyden (@RonWyden) August 9, 2021
Call to Vote Derailed by One Senator
However, this unanimous vote did not come to be. Senator Richard Shelby (R-Al.) objected to unanimous consent, which would have allowed the legislation to pass only if no one opposed it. Shelby asked for the bill to include an increase in military spending by roughly $50 billion.
Sen. Bernie Sanders (I-Vt.) rejected Shelby’s plan because he objected to his unrelated amendment to increase military spending. As the call to vote needed unanimous support by the Senate, the amendment was effectively killed.
How Will USA Usurp China’s Place in the Cryptocurrency World?
During the debate, many senators highlighting concerns about the U.S. losing the technology innovation battle to China.
They also highlighted that although China has cracked down on non-state cryptocurrency initiatives, the U.S. has a chance to encourage innovation in crypto on its borders. In addition, the senators highlighted how Bitcoin’s carbon footprint has decreased as more renewable energy sources are being used.
Cryptocurrency opponents have criticized bitcoin for its alleged pollution for many years. According to recent research from Cambridge University, however, the geographical footprint of mining has shifted over the past six months, which will result in a more sustainable bitcoin. The recent surge in China’s large-scale cryptocurrency crackdown triggered a domino effect in the mining industry.
To begin with, it was virtually overnight when over half of the world’s bitcoin miners went down. As a result, mining has decreased, and with it, the amount of equipment and electricity used. This means that bitcoin’s effect on the environment has been reduced.
Bolstering Beijing’s new crypto regulations also put many older and less efficient pieces of equipment offline. China’s decision to lock down its door to cryptocurrency mining has triggered a mass exodus. Mining companies have moved from looking for the most cost-effective sources of energy to instead seeking out renewable resources.