48 Hours Until This Bill Impacts Crypto
This is the united states infrastructure bill sitting on the house floor and hidden in the spending bill is new legislation on crypto. However, it seems like theres a lot of confusion on what this legislation actually does. So having a lot of personal experience in interpreting this kind of legislation, i decided to do my part here and break down this bill to show what it really does, and this way you can make more informed decisions going on from here in the future. So lets talk about this bills, likely future whats in the bill, how it impacts crypto and where the confusion lies here. So the bill in question is the one trillion dollar united states bipartisan spending bill. This massive bill is made to give the united states a kind of infrastructure facelift and has already passed in the senate and now needs a thumbs up from the house and from the president, and then it will go into effect. I know this is a weird place to add laws on crypto within a bill thats supposed to focus on like roads and bridges and stuff like that, but welcome to american politics. Now the house is set to vote on this bill on thursday, the 30th of september. So, very soon, if youre not familiar with how legislation works in the u.s about 90 percent of the time, you know whether a bill will be passed or not ahead of time for two reasons. First, because legislators will signal which way that they plan to vote, and second leaders will typically not put a bill on the floor for a vote unless they first have all the votes they need to pass it.
They just dont waste their time like that. In fact, here is what nancy pelosi said about this weeks vote. What let me just say were going to pass the bill this week, so its far more likely than not that this bill will be passed this week. The issue with this bill is the poorly written language within the bill that impacts, crypto and thats. What youre here for the intention was to collect some more tax revenue from crypto, but it was written too broadly and it oversteps some boundaries that crypto enthusiasts and crypto lobbyists are like hey, you know hold on, we got ta, we got ta fix this language, a Little bit now, crypto lobbyists fought this language in the bill about a month ago, but unfortunately failed and were now stuck in a situation where poorly written laws on crypto are very likely to be passed. Not a great situation to be in, but i dont want you to lose all hope, because there could be a solution. Still dont dont go crazy, dont, go selling off everything. Just watch to the end of the video so lets. First talk about whats in this bill. More specifically and then well go deeper into our options regarding crypto now, luckily for us, i spent an ungodly amount of time combing through the 2700 page bill text last month and i hand made 13 graphs to show exactly where funding is going so contextually ive broken This bill into two major parts: new funding and existing funding, but half the bill is simply continuing.
Funding on existing projects so were not going to focus much on that were going to focus on new spending and new laws. Only so heres a top line overview of the new spending in this bill. We can see theres a lot of money here: 110 billion dollars to roads, bridges and major projects; 66 billion dollars to passenger and freight rail programs, 11 billion dollars to safety, ‘ billion to public transit; 65 billion of broadband, 17 billion to ports and waterways 25 billion. To airports, 7.5 billion dollars to school bus and ferry emissions, 73 billion dollars to power and grid 55 billion to water infrastructure and 46 billion to resiliency now lets break this down a little bit further and look at each section individually. The largest one is roads, bridges and major projects. We have bridge grant programs, we have the raise grant. This is funding for roadways, rails and ship transportation. We have multimodal and freight transportation. This is basically freight infrastructure, the infra grant. This is railroad updates, research, amtrak funding, updates to the youre, not going to believe this. This updates the amtrak smoking policy within the funding of this bill, thats literally in the bill text the appalachian highway. This is funding for areas in the 13. Appalachian states helps the highway there. Then we have passenger freight and rail for the next major section northeast corridor grants. This is funding for maintenance and the backlog of the amtrak. You can see theres a lot going on here with the amtrak and other railway kind of spending.
We have inner city passenger rail funding this inc. Another funny thing here. This includes a study on trains larger than 7 500 feet. We have the amtrak national network, rail infrastructure and safety and railroad crossing elimination program. This just basically eliminates dangerous railroad crossings. The next major section is public transit, so theres a big section here of increased contracts, theres a 43 increase in funding for the next five years. Here, state of good repair, they basically are saying 40 of buses and 23 percent of rail assets are in poor conditions, and this supports the the repair and maintenance for those things: capital investment grants. This is funding for a new and expanded commuter and a light rail project, also bus services and ferry services. A lot with ferries here as well youre going to see that repeated a whole bunch of times and senior and disabled mobility. This basically just removes barriers to transportation for all the low no program. This is for the purchase and lease of zero or low emission buses. Then we have safety and research, so increased contracts for the fmcsa and the nhtsa the safe streets for all program. This is basically plans to reduce crashes and fatalities of cyclists and pedestrians on roadways, and then we have safety programs for driver behavior and safety and safety for commercial vehicles within here and then airports. We have formula airport funding now what this means is they basically give airports discretionary funding to spend money on the things that they think they need to spend money on.
You know those could be runways, taxiways, noise reduction, terminal funding, you name it. Then we have discretionary funding for small airports and funding for air traffic control. Then we have ports and waterways and dont worry theres, not a whole lot left here, a lot of funding for the army corps of engineers. This includes funding for project backlogs funding for inland waterways, ecosystem restoration, shore protection, a whole lot more there, port infrastructure and marine highways. This is improvements to port facilities on coast, rivers and lakes, funding for the u.s coast, guard ferry and terminal construction. A lot with ferries, like i said, land ports of entry. This is just port modernization. Then we have broadband funding, so the private activity bonds. This is funding for broadband in rural areas, affordability, construction and tech. So, basically, what theyre doing here is theyre. Looking at the middle mile companies, so the companies who assist in the transmission of broadband and theyre either giving them more funding or theyre doing some acquisitions here and they plan to subsidize broadband rates in certain areas that way its more affordable for everyone. Tribal grants to increase broadband in tribal areas, then we have grants to states which is a project thats, aiming to get 100 megabyte, download speeds and 20 megabyte upload speeds, basically everywhere in the us. Then we have power infrastructure which includes great infrastructure, clean energy fuels and tech and hydro power. Then we have water infrastructure which is needed here in the us.
This just helps aging infrastructure, repair, increased water storage, desalination efforts, water recycling, dam safety and a whole lot more. There with water, then we have resiliency fema ton of money going to fema and projects that reduce risks of natural disasters, waste management, which is like recycling, education, battery recycling, ocean debris, reduction, drought, funding. You know what that is: funding for ecosystems, which is just funding for like lakes and natural habitats, wildfire management and then cyber. This is to help develop a consensus as to what the u.s should do during cyber attacks, which has been a huge issue recently and then. Lastly, we have school bus and ferry emissions, 7.5 billion dollars, so the clean school bus program, the ferry grant program and the electric ferry pilot program. Now after hearing this, you might be thinking like okay. So how does crypto fit into this, and you wouldnt be alone in thinking that doesnt make total sense, but crypto fits in because they plan to collect additional taxes from crypto in order to pay for a portion of this bill thats how it fits in a small Portion of the bill that is now hidden away on page 2433 are new laws for crypto regulations within this infrastructure bill. So lets break those down hopping over to the bill. We can see information reporting for brokers and digital assets. This is what were looking for here. So first were going to do some defining and make sense of the gobbledygook.
That is legislative text. So first were going to look at the definition of digital asset, which is right here. Digital asset means any digital representation of value, which is recorded on a cryptographically secured, distributed, ledger or any similar technology. Now we need to scroll up here and look at brokers, because this is one of the major issues here in the reporting of digital assets, so brokers and the definition of brokers is in another law. So this is something that happens a lot in legislative text. They just refer to other ones, so its like impossible to read and you have to pull up other bills. So here we have the law that says what brokers are and what they should do, and one major thing that they should do is show the name and address of each customer. If we scroll down a little bit here to the definitions, one of them is any other person who regularly acts as a middleman with respect to property or services. Now, in this instance, a broker is very loosely defined in the case of crypto. This could encompass stake, pool operators, miners and a ton of other crypto services that could technically be considered brokers. So if we scroll down further here, we can see what brokers are required to report to the irs. We have to scroll way down here, and one of them is a specified security in this section b. So if we go back to the bill text here, it says that they need to strike out a section of the bill text and add in any digital asset, within this definition of a specified security, which means any broker which is given a large definition here has To report these specified assets which now encompasses any digital asset, and then this brings us to the second issue.
Dont worry im going to summarize all this. The second issue is the reporting so reporting. Here we can see any broker which we know. This is a loose definition now, with respect to any transfer during a calendar year shall make a return for that year. Now these words in between that make no sense. This basically says any broker, who processed a transfer in a calendar year of a digital asset which was defined earlier, will need to report it to the irs, and they need to treat that transfer as they would treat cash the treatment as cash for the purposes of Section 6051 d: now, if we look at the text for that, this basically says any transfer of more than ten thousand dollars needs to be reported to the irs. So, to summarize, this theres a few issues within this bill text that people absolutely do not like and for good reason. First, the loose definition of broker that can encompass a miner, a stake pool operator certain defy operators. Second, the kyc requirements for nearly anything having to do with crypto and third reporting requirements that are very similar to cash. Now, if youre, a normal crypto buyer who pays their taxes, will this impact you no no at least not directly? This is where i think the confusion really lies. This is far from the end of the world. In my opinion, if you run crypto services like a stake, pool or youre a miner, you run some kind of defy service.
This could very well impact you now. This impact of those services may have secondary and tertiary effects to crypto holders if it means fewer people use d5 or crypto is less prevalent in general, but im here to say that even this is fairly unlikely, and this is because – and i quote, the treasury has Reportedly said that it will provide clarifying guidance after the bill is passed to provide exemptions to firms who do not actually operate as brokers. Now. What does this mean exactly? It basically means that the fears of this impacting miners and stake, pool operators and other defy operators is a fairly unlikely worst case scenario, and this is fairly common in legislative texts where a lot will be made, but its up to the agency to come up with Specific guidelines – i saw this personally with small business stimulus programs. Money was allocated to help small businesses and then the sba had some discretion to build out the finer rules and finer details. So, with a flurry of worry and agitation about this bill language, it wont go unnoticed by the treasury and the irs who will then likely make additional adjustments to the actual language. These adjustments are so common that they actually have a name. Its typically called an interim final rule, so in summary, well, this language would be better off fixed before being passed into law. The odds are on our side that it wont blow up into a massive issue, like some news outlets may lead you to believe.
So i hope this was helpful in understanding the situation the bill and what may happen in the future and, as always, i hope you have a profitable day.