New U.S. Infrastructure Bill Hopes to Raise $28 Billion Through Crypto Taxes

The White House hopes to raise $28 billion from crypto investors by applying new information reporting requirements to crypto exchanges and other parties, according to a copy of a bipartisan infrastructure bill, but it is unclear how soon the funds will be available.

The White House said on Wednesday that an infrastructure bill that has been brewing in the U.S. Senate for months would be paid for in part by strengthening tax enforcement on cryptocurrencies.

The bill states that any broker that transfers any digital asset will need to file a return under the revised information reporting regime, and it also includes decentralized exchanges and peer-to-peer marketplaces in the definition of a broker.

“The provision includes an update to the definition of a broker-dealer to reflect the realities of how digital assets are acquired and traded,” the document states. “The provision further clarifies that broker-to-broker reporting applies to all covered securities transfers under section 6045(g)(3), including digital assets.”

The crypto-reporting requirement is one of a list of 14 new “pay-for-it” items included in the bill, which also includes repurposing COVID-19 relief funds, auctions, Superfund fees, fuel sales and other revenue sources.

Kristin Smith, executive director of the Blockchain Association, said the draft law could mean some individuals interacting with cryptocurrencies would have to start reporting their transactions.

The $1 trillion infrastructure bill also includes funding for public transportation, particularly passenger rail; investments in bridges, clean drinking water and wastewater infrastructure; and high-speed internet access for all Americans, according to a White House fact sheet.

President Biden praised the team that negotiated the bill in a statement. "Everyone from unions to business leaders, as well as economists on the left, right, and center, agrees that the public investments in this deal will mean more jobs, higher productivity, and higher economic growth in the long run," he said in a statement. "Experts agree that most of the benefits of this deal will flow to working families."

The fact sheet states that “this agreement will have significant economic benefits over the coming years. In addition to revenue generated by higher economic growth from investments, it will also provide funding through the reallocation of unspent emergency relief funds, targeted corporate user fees, enhanced tax enforcement with respect to cryptocurrency, and other bipartisan measures.”