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Senators are close to compromising on tax rules affecting cryptocurrencies, but the arrival of a deal may not be in time to be added to a relevant bill headed through the Senate.
Two groups of senators are in discussions over tax rules that would impact cryptocurrencies like Bitcoin, in requiring entities to report transactions to the Internal Revenue Service. Each side wants changes made to an infrastructure bill that is on its way through the Senate, but now with a very tight time limit.
The dispute puts a White House-preferred amendment against one favored by Senate Finance Committee Chairman Rob Wyden, reports Bloomberg. Specifically, the discussions relate to the definition of cryptocurrency brokers that are required to report transactions.
The existing language in the infrastructure bill has been criticized for being too broad, which would require business such as cyptocurrency miners and software developers to report data to tax collectors. However, this data may not necessarily be information those parties have access to in the first place.
The amendments address the broadness by exempting specific groups from the rules, with a compromised version being worked on between the groups. The joint version may include changes that would alleviate concerns the original text favored mining activities that consumed the most energy and were not environmentally friendly.
"The idea behind the amendment in the bipartisan deal is simply to level the playing field on reporting," said Senator Elizabeth Warren. "It's not a direct tax on crypto, it's simply a reporting requirement that's in place everywhere else."
While the groups are getting closer to a final version of the amendment to the infrastructure bill, time is against the measure. The bill is in a period where the Senate lawmakers are arguing over which bill amendments should be considered, and how long each should be debated for.
With the number of amendments being argued over, and that any single senator can block a vote on an amendment in the first place, the chance of the bill being voted on is quite slim. There's also a 30-hour debate time period on the final passage of the bill that runs until early Tuesday morning, though again that could be cut short as well.
The bill amendment discussions are the latest event in US politics relating to cryptocurrencies, and the government's handling of them.
In May, the U.S. Treasury announced a plan to tighten regulations on cryptocurrency markets and holders, in requiring any transfers worth $10,000 or more to be reported to the IRS.
Meanwhile, Securities and Exchange Commission Chair Gary Gensler said in August that Congress should create a law to grant the commission the authority to monitor cryptocurrency exchanges.
Over in China, cryptocurrency miners scaled back their operations in May, after the government announced a crackdown on both mining and trading behavior. The State Council's Financial Stability and Development Committee claimed it as an effort to prevent and control financial risk across the entire financial industry, among other measures.