Requirements for crypto trading in US infrastructure law
The infrastructure package aims to modernise the infrastructure in the USA and at the same time stimulate the economy. Negotiations between Democrats and Republicans have been going on for months. In essence, it is about investing money in roads or bridges. However, the US infrastructure bill is suddenly also about cryptocurrencies. It is also interesting that some cities in the US already have their own cryptocurrency, such as the Miami Coin.
The US crypto scene is ultimately expected to help pay for the package via stricter reporting requirements. The infrastructure package includes an expenditure of 550 billion dollars. One part of the bill is about tightening the strict taxation of transactions with cryptocurrencies, which have been rather few until now. In this way, 28 billion dollars could be flushed into the coffers of the US government in the next few years.
This sum is less of a thorn in the side of the crypto scene than a paragraph dealing with miners, investors and operators of crypto exchanges. This could have serious consequences for the entire industry in the USA. The bill originally stated that anyone who regularly offers and is responsible for digital capital transfer services would be subject to the same reporting requirements as securities brokers.
Disclosure of all data to tax authorities
So anyone offering corresponding crypto services in the USA will soon have to report the names and data of all participants in transactions to the IRS. This also applies, for example, to miners who verify transactions on the blockchain. But for miners, this is impossible in practice. It is conceivable that miners will now leave the USA. Some are already interpreting the passage in the law as a ban on mining.
After the relevant passage of the infrastructure law became known, companies, lobby groups and celebrities such as Twitter founder Jack Dorsey joined forces and spoke out for an amendment to the law. Senators from both parties subsequently submitted amendments, but these were probably submitted too late. However, the law still has to pass the House of Representatives. An amendment could still be implemented there.
Data centres in China shut down
In China, data centres were shut down a few months ago in order to take action against cryptocurrency. In addition, banks and financial service providers were repeatedly asked to offer more services in connection with cryptocurrencies. This should maintain the stability and security of the financial market and protect the assets of the population.
Trading in cryptocurrencies was already banned in China in 2017, but mining continued to be tolerated. For some months now, the Chinese government has also been taking stricter action against mining. Most recently, about two-thirds of all new Bitcoins were produced via computers in China.
In China, the central bank, which reports directly to the state leadership, is responsible for monetary and currency policy. The yuan is not freely convertible. Therefore, bitcoin is a contradiction to Chinese policy. However, the government in Beijing is working on its own cryptocurrency. The news from China caused the Bitcoin price to fall, as it often does.
Crypto shares new financial product
With crypto shares, a new financial product is in the starting blocks. Similar to cryptocurrencies, they are not material. Crypto stocks do not necessarily have to be backed by real shares, which is raising regulators' eyebrows. Moreover, there is probably a passage in the US infrastructure package that could make crypto trading in the US more difficult.
Crypto stocks are similar to CFDs, which have been tradable at terminals like metatrader Exness for years. Cryptocurrencies can be traded via CFDs. No wallet is required for this. Therefore, traders are protected from hacker attacks.