What is Joe Biden’s infrastructure bill and could it change how cryptocurrency is taxed?

A NEW infrastructure bill by President Joe Biden is moving through Congress and could soon be signed into law.

The bill is worth $1.2trillion. We explain what you need to know about it and whether it could change how cryptocurrency is taxed.

We explain what you need to know about the infrastructure bill and how it could affect cryptocurrency investors1

We explain what you need to know about the infrastructure bill and how it could affect cryptocurrency investorsCredit: Alamy

What is the infrastructure bill?

The infrastructure bill, known as HR 3684, allocates $550billion in funding to improve America’s infrastructure.

The package breakdown allocates $110billion for roads and bridges, $39billion for public transit systems, and $66billion for railroads.

An additional $55billion would be included in the bill for water and wastewater infrastructure.

It’ll also make funds available for electric vehicle charging stations and airports.

5 risks of crypto investments

BELOW we round up five risks of investing in cryptocurrencies.

  • Consumer protection: Some investments advertising high returns based on cryptoassets may not be subject to regulation beyond anti-money laundering requirements. 
  • Price volatility: Significant price volatility in cryptoassets, combined with the inherent difficulties of valuing cryptoassets reliably, places consumers at a high risk of losses.
  • Product complexity: The complexity of some products and services relating to cryptoassets can make it hard for consumers to understand the risks. There is no guarantee that cryptoassets can be converted back into cash. Converting a cryptoasset back to cash depends on demand and supply existing in the market. 
  • Charges and fees: Consumers should consider the impact of fees and charges on their investment which may be more than those for regulated investment products.  
  • Marketing materials: Firms may overstate the returns of products or understate the risks involved.

The bill overcame several hurdles in the Senate over the weekend, and now goes to a final vote.

The future is less certain in the House of Representatives, however, where there are clashes over the size of the spending.

Making a last-minute plea for passage, Biden tweeted on Saturday that the bill represented a “historic, once-in-a-generation investment in our nation’s infrastructure”.

He added: “We can’t afford not to do it.”

Could it change how cryptocurrency is taxed?

Yes, the Biden administration aims to raise $28billion of the bill’s funds by tightening tax rules around cryptocurrencies.

The provision would require brokers to report gains in a type of 1099 form, in addition to reporting transactions of more than $10,000 to the IRS.

However, this has met with backlash, with crypto advocates urging lawmakers to clarify the current broad definition of a “broker”.

Twitter chief executive Jack Dorsey also tweeted about the bill over the weekend, and said: “Forcing reporting rules on Americans who develop software and hardware, who mine and secure the network, or who run nodes to build resilience and efficiencies, is an impossible ask that will only drive development and operation of this critical technology outside the US.”

At the moment, the definition is set as “any person who (for consideration) is responsible for regularly providing any service effectuating transfers of digital assets on behalf of another person”.

In response to the criticism, Senators Ron Wyden, Pat Toomey, and Cynthia Lummis, R-Wyo have proposed an amendment that explicitly excludes miners and developers.

This is due to the difficulty for them to report required data.

Meanwhile, another suggested amendment by Senator Mark Warner, Rob Portman, and Kyrsten Sinema would reportedly exempt miners who participate in “proof of work” systems like Bitcoin and Ethereum.

However, it’d maintain the reporting requirements for those using a “proof of stake” system used by many altcoins.

The values of Bitcoin and Ethereum fell in May after China announced a further crackdown on cryptocurrencies.

We reveal how scammers are using influencers on Instagram and TikTok to dupe crypto investors.

Meanwhile, the founder of Ethereum recently became the world’s youngest crypto billionaire at the age of 27 after it surged in value.

Utah man lost £278k in cryptocurrency scam after being tricked by fake trading app


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