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US Senators Propose a More Nuanced Take on Cryptocurrency Regulations

Bitcoin sitting on American flag
(Image credit: Shutterstock)

U.S. Senators Ron Wyden (D-OR), Cynthia Lummis (R-WY) and Pat Toomey (R-PA) introduced an amendment to the $1 trillion Infrastructure Investment and Jobs Act (IIJA) yesterday to address concerns with its proposed cryptocurrency regulations.

Cryptocurrency isn't the central focus of IIJA—the bill's main purpose is funding improvements to U.S. infrastructure—but it contains several provisions that were supposed to make it easier for financial regulators to oversee the crypto market. The rules were also expected to raise up to $28 billion over 10 years via federal taxes.

The provisions were criticized for being overly broad, however, with the Electronic Frontier Foundation arguing that they mean "almost every company even tangentially related to cryptocurrency may suddenly be forced to surveil their users." The amendment introduced by Wyden, Lummis, and Toomey sought to change that.

Sen. Lummis' office explained in a press release:

"The senators’ amendment would clarify that 'brokers' mean only those persons who conduct transactions on exchanges where consumers buy, sell and trade digital assets, and does not require information reporting from persons who engage in mining or staking, selling hardware or software that an individual may use to control a private key, or developing digital assets or their corresponding protocols for use by other persons if such other persons are not customers."

The proposed amendment is just two-and-a-half pages long, which is insignificant compared to the 2,702 pages that make up the bill itself. It could take a while for lawmakers to even discuss the change's merits, however, because it's one of 456 existing amendments related to IIJA, and that number could grow by the day.

MarketWatch reported that the changes would reduce the potential $28 billion raised via the new cryptocurrency provisions by $5.2 billion. That's still a drop in the bucket compared to the $1 trillion in spending covered by IIJA, but it could still inspire opposition from lawmakers keen to cover that spending any way they can.

But senators Wyden, Lummis, and Toomey made it clear in their announcement that they believe it's more important to support the development of digital assets, including cryptocurrencies, than to make an extra $5.2 billion over the next decade. 

“Digital assets are here to stay," Sen. Lummis said in a statement. "While much more work needs to be done, this amendment is a responsible step toward fully incorporating digital assets into the U.S. financial sector ... I look forward to continuing this bipartisan work to bring our financial industry into the 21st Century.”