The United States plans to tax cryptocurrencies to support infrastructure construction. Musk and Dorsey expressed strong dissatisfaction

Beijing time, May 20th, morning news, it is reported that the trillion-dollar infrastructure construction plan proposed by the Biden administration of the United States is about to be voted on in the U.S. Senate. Recently, from Silicon Valley in California to Washington, many American political and business leaders have expressed concerns about the possible taxation of cryptocurrency transactions in this plan.

Last Saturday, U.S. Senator Ted Cruz said that the Biden administration’s infrastructure plan includes "dangerous provisions" that could deal a major blow to cryptocurrency and blockchain innovation.

Musk, the boss of Tesla Inc and a longtime cryptocurrency supporter, said the plan was too hasty and it was too early to let U.S. lawmakers pick winners or losers from the new technology.

Last week, the Senate introduced a bill for an infrastructure plan that amended Biden's plan, including a new tax on cryptocurrency trading companies and brokers, which is expected to collect $28 billion over the next decade. The White House said the funds from the new cryptocurrency tax will be used for Biden's infrastructure package.

The new tax has sparked criticism from the public, with critics saying that the actual tax recipients may be larger than expected, and that some cryptocurrency companies do not meet the tax filing requirements.

Proposing amendments

Last week, three U.S. senators, Ron Wyden, Cynthia Lummis and Pat Toomey, proposed an amendment to the law that would more precisely define “cryptocurrency brokers.”

In a statement, Lu Mingsi said that the fields of digital assets and financial technology are extremely complex, and U.S. senators have been working with the Biden administration and industry stakeholders to integrate digital assets into tax laws without damaging technology or suppressing innovation.

A separate amendment proposed by several other senators, backed by the White House, would allow some cryptocurrency investors to avoid new taxes.

White House press secretary Jen Psaki said the White House believes that the second amendment has struck a certain balance and is an important step in improving industry companies' compliance with new taxes.

Silicon Valley Discontent

U.S. cryptocurrency-related companies said the two amendments were not strong enough to protect an emerging cryptocurrency market.

A spokesperson for Andreessen Horowitz, a well-known American venture capital firm, said that if the second amendment is passed, it will be a loss for the entire United States and will affect the United States' ability to serve as a world innovation center.

Senator Tumi said the White House has acknowledged that there are problems with the new cryptocurrency tax, but the second amendment selects winners and losers based on the technology used, which is bad for technological innovation.

Stuart Alderoty, a lawyer for U.S. cryptocurrency company Ripple, said on Twitter that, as the company has held for years, the U.S. government should not pick winners and losers in the cryptocurrency market.

Suppressing innovation

Jack Dorsey, CEO of Twitter and Square, said the new taxes would drive technological innovation out of the United States.

Dorsey said that if lawmakers cannot finalize the terms, they can hold hearings or consider more, such as defining cryptocurrency brokers as "places where digital assets are exchanged for legal currency", that is, "broker = legal currency to cryptocurrency trading platform."

Anne Fauvre, chief operating officer of Oasis, said the content of the new Senate bill will inhibit innovation among U.S. cryptocurrency companies for the next 20 years.

Frey said the role of regulation is to create guardrails for industries, but the Senate bill would completely destroy a nascent industry and would "kill innovation and value creation for American companies."