The infrastructure bill is now U.S. law. Attention to its crypto provisions is still ramping up.

Examining the intersection of cryptocurrency and government

By Nikhilesh De

Managing Editor, Global Policy & Regulation

November 19, 2021

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Hey folks,

Welcome to a special edition of State of Crypto, a CoinDesk newsletter looking at the intersection of cryptocurrency and government. I’m your host, Nikhilesh De. You’re probably here because you signed up, but in case you’re not a fan, you can unsubscribe here.

I have to say, there’s nothing quite like chilling in a hotel room while on vacation and realizing the House of Representatives is about to vote on the bipartisan infrastructure bill we’ve been paying close attention to since August. And nothing else quite like realizing you had a draft all ready to go from a month prior. IYKYK.

Hope you enjoy this special Friday edition of the newsletter.

—Nik

Bipartisan infrastructure bill law

U.S. President Joe Biden (Getty Images)

The narrative

The bipartisan infrastructure bill is now the bipartisan infrastructure law. U.S. President Joe Biden signed the Infrastructure Investment and Jobs Act into law on Monday, and lawmakers have already gotten to work introducing measures in an effort to modify or mitigate the crypto-related provisions in the legislation.

Why it matters

We don’t yet know what is the true impact of the crypto provisions in the infrastructure bill. The Treasury Department has yet to explain how it will interpret the definition of a “broker” for crypto tax-reporting purposes, or how other provisions will be enforced.

Breaking it down

A lot of lawmakers are looking to change the crypto provisions in the infrastructure bill. Yesterday, representatives. Patrick McHenry (R-N.C.), Tim Ryan (D-Ohio), Kevin Brady (R-Texas), Ro Khanna (D-Calif.), Tom Emmer (R-Minn.), Eric Swalwell (D-Calif.), Warren Davidson (R-Ohio), Anthony Gonzalez (R-Ohio) and Ted Budd (R-N.C.) introduced a bill to change all of the provisions, including a tax code change and broker transaction provision.

Previously (as in earlier this week), senators Cynthia Lummis (R-Wyo.) and Ron Wyden (D-Ore.) introduced a bill to modify the broker definition specifically, continuing their efforts from when the Senate was deliberating the infrastructure bill itself.

(Lummis might also be introducing another bill in the Senate?)

We’ve heard from lawmakers on both sides of the political aisle looking for a change to the crypto provisions, including from Rep. Anna Eshoo (D-Calif.), an ally of House Speaker Nancy Pelosi (D-Calif.). I’m not sure yet just how wide this support is, but we know that the crypto industry has made a lot of noise, and it’s fair to say that lawmakers are aware of the industry’s views on this law.

What I’ll be looking for now is movement from the chairs of any committee with oversight, such as Rep. Maxine Waters (D-Calif.) from the House Financial Services Committee. If a bill to modify the infrastructure bill is discussed in committee, that could be a sign it will proceed through the process of becoming a law.

We’re starting to come up on the holiday season, though, and the number of bills Congress debates and passes will start to drop soon. The big ones will be the National Defense Authorization Act and the Build Back Better Act (both of which have crypto provisions as well, though nothing the industry is particularly fussed about).

In other crypto regulatory news, House Republicans on the Agriculture Committee have published a discussion draft of the Digital Commodity Exchange Act (DCEA). This comes a few weeks after Acting Commodity Futures Trading Commission Chair Rostin Behnam suggested his agency may be better suited to oversee the crypto spot markets broadly.

Readers of this newsletter might also remember that the DCEA – as it was first introduced in 2020 – seemed to fit Securities and Exchange Commission Chair Gary Gensler’s description of how Congress could approach crypto regulation.

This is still just a discussion draft, meaning it hasn’t even been introduced to the House committee yet, but the bill bears watching.

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The Biden Bunch

Changing of the guard

Key: (nom.) = nominee, (rum.) = rumored, (act.) = acting, (inc.) = incumbent (no replacement anticipated)

OCC nominee Saule Omarova faced the Senate Banking Committee yesterday in a, frankly, kind of bizarre 2.5-hour session. While a lot of questions focused on past papers she wrote, including one examining what a central bank digital currency might mean for the U.S., others were more focused on the fact she grew up in Kazakhstan while it was part of the Soviet Union. Senators Jon Ossoff (D-Ga.) and Cynthia Lummis (R-Wyo.) were the only two to directly ask questions about cryptocurrency regulation.

Still, whether or not Omarova’s nomination proceeds to a full Senate vote seems to depend on senators Jon Tester (D-Mont.) and Mark Warner (D-Va.), who asked her about her views on bank supervision, among other issues.

For those of you who have been following the Ira Kleiman v. Craig Wright case, the trial finally began a few weeks ago. CoinDesk has been on the ground every day. You can catch up on this week’s testimony here:

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Consensus 2022, the must-attend crypto and blockchain experience of the year, is heading to Austin, Texas, from June 9-12, 2022. This is the only festival showcasing and celebrating all sides of the blockchain and crypto ecosystems, and their wide-reaching effect on commerce, culture and communities. Register now for the lowest price.

Some of you may have noticed I was on vacation the past two weeks. In lieu of my usual thing, please enjoy this gif of a video I took while enjoying Amtrak’s Capitol Limited and Empire Builder trains across the country.

If you’ve got thoughts or questions on what I should discuss next week, or any other feedback you’d like to share, feel free to email me or find me on Twitter.

You can also join the group conversation on Telegram.

See y’all next week!

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