A crucial crypto-friendly amendment in the $1.2 trillion US Infrastructure Bill has failed to reach a consensus among US Senators due to a lone senator.
According to a Forbes publication on Monday, August 9, Senators Rob Portman, Cynthia Lummis, Patrick Toomey, Ron Wyden, and Kyrsten Sinema were able to reach a compromise to change the bill’s provisions that deal with cryptocurrencies. The original language of the bill required any node or miner, as well as software developers, to be categorized as a broker and required tax reporting to the IRS.
But this definition of broker was met strong opposition from the community and some senators as they believed the original wording of the bill would put unworkable requirements on Bitcoin node runners, developers, and miners.
So, there was a bipartisan agreement on an amendment to this US Infrastructure Bill HR 3684 among three Senators from Republican Party and two from the ruling Democratic Party. The amendment proposed a change to the definition of broker that exempted software developers, transaction validators, and node operators, while tax reporting requirements should only apply to the crypto exchanges, such as Coinbase.
On Monday, August 9, Senator Patrick Toomey introduced a process known as Unanimous Consent, which required zero objections to pass the amendment. There was widespread support for the amendment but the lone senator from Republican Party Richard Shelby rejected this crypto-friendly provision due to a dispute over military spending.
According to reports, Shelby asked for a $50 billion defense amendment to the bill. Senator Bernie Sanders from Democratic Party objected to the Shelby motion, resulting in Shelby then objecting to the overall compromise. As the amendment required zero rejection, this crypto-friendly amendment will not make it into the final bill.
Senator Ted Cruz made a last-ditch effort by asking for unanimous consent on stricken the crypto language from the bill altogether. He talked about the damage that bill would bring to the crypto industry and innovation in America. He said:
“The current bill widens the definition of a broker those who would have to collect information on cryptocurrency consumer and report this information to the IRS. It would force every single participant in cryptocurrency structure to operate as a financial institute, which would mean they would have to provide consumers information to the IRS that in fact, they do not have access to this information.”
Senator @tedcruz 100% nails it. Why are we trying to regulate something we absolutely don’t understand?!! pic.twitter.com/9L9r6EJaSp
— Bill Barhydt (@billbarX) August 9, 2021
Ted Cruz further said that the majority of the senator did not have a real understanding of cryptocurrencies and therefore, regulators should take time to understand and regulate this sector. However, Shelby again objected for the same reasons.
With no more chances to alter the bill’s language, the US Infrastructure Bill will be voted on the Senate floor, which is expected to happen on Tuesday, August 10. If this bill becomes a law, it is expected to be implemented in 2023.
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