Today, the Chairman of the House Financial Services Committee, Patrick McHenry (NC-10), reintroduced the Keep Innovation in America Act for the 118th Congress alongside Rep. Ritchie Torres (NY-15) and a bipartisan group of lawmakers. The legislation will fix the digital asset reporting provisions in the Infrastructure Investment and Jobs Act, now law (PL 117-58), and provide much needed clarity to technology innovators and entrepreneurs.
Read a one-page summary of the Keep Innovation in America Act here.
Read the text of the bill here.
“America can either cement our position as the leader of the global financial system, or we can allow this wave of innovation to pass us by,” said Chairman McHenry. “The digital asset ecosystem holds tremendous potential to bring more Americans into our financial system and serve as the building blocks of the next generation of the internet. Unfortunately, misguided policy and regulatory overreach threatens to push this dynamic industry—and its potential benefits—overseas. The Keep Innovation in America Act will fix the poorly constructed digital asset reporting requirements included in the Infrastructure Investment and Jobs Act. I’m proud to lead this bipartisan legislation to provide desperately needed clarity for innovators and entrepreneurs.”
“I am proud to be working in a bipartisan manner to cosponsor the Keep Innovation in America Act,” said Rep. Torres. “The cryptocurrency industry is constantly growing and evolving, which means Congress must be able to respond in a way that provides balanced and appropriate oversight and protects consumers without stifling the next generation of competition and entrepreneurship. This common-sense legislation, which has earned the support of key industry and market participants, brings digital asset reporting requirements in line with the current ecosystem and offers much-needed legal and regulatory clarity to help cement our continued place as the global leader in crypto technology and innovation.”
“I am glad to support Chairman McHenry’s Keep Innovation in America Act to fix the definition of a ‘broker’ in the Infrastructure Investment and Jobs Act,” said Digital Assets, Financial Technology and Inclusion Subcommittee Chairman French Hill (AR-02). “Treasury should not apply these digital asset tax reporting requirements on entities like miners, validators, and developers that don’t have access to customer information.”
“As blockchain technology continues to rapidly grow, it is critical for our country to be a responsible leader in the global community and ensure that consumer protection is at the forefront of our efforts. These technological advances will improve our daily lives and drive innovation for the 21st-century economy,” said Rep. Darren Soto (FL-09).
“The Keep Innovation in America Act is vital for repairing the unworkable language that Congress passed in the Infrastructure Investment and Jobs Act,” said Digital Assets, Financial Technology and Inclusion Subcommittee Vice Chairman Warren Davidson (OH-08). “Providing this clarity formally welcomes innovation and progress within the fintech space.”
“As the cryptocurrency industry continues to grow, I’m proud to support the bipartisan Keep Innovation in America Act, which will ensure that the industry has appropriate regulation while still being competitive as a form of currency and maintaining consumer protection,” said Rep. Eric Swalwell (CA-14).
“The nonsensical digital asset reporting requirements included in the Infrastructure Investment and Jobs Act of 2021 will send crypto innovation and opportunities oversees, leaving the United States far behind in the global race to lead in the next phase of the digital economy,” said Majority Whip Tom Emmer (MN-06). “I’m proud to continue to support Chair McHenry as a cosponsor of the Keep Innovation in America Act to clarify the U.S. Tax Code’s definition of ‘Broker’ so the future of the digital asset ecosystem reflects American values.”
“Our current digital asset ecosystem is outdated and hindering innovation,” said Rep. David Schweikert (AZ-01). “This bipartisan legislation will help modernize digital asset reporting requirements, prevent innovators and entrepreneurs from moving overseas, and bring our regulatory framework into the 21st century.”
Background:
- On January 27, 2022, Chair McHenry and a bipartisan group of lawmakers sent a letter to Treasury Secretary Janet Yellen on the new digital asset reporting requirements urging her to provide additional clarity to America’s innovators and entrepreneurs.
- In an April 5, 2022 letter to then Ranking Member McHenry, the Treasury Department acknowledged that “ancillary parties who cannot get access to information that is useful to the IRS are not intended to be captured by reporting requirements for brokers.” However, it is unclear how Treasury will treat other firms as brokers under Section 80603.
- On December 15, 2022, Chair McHenry sent a letter to Treasury Secretary Janet Yellen urging her to prioritize rulemaking under the digital asset reporting provisions of the Infrastructure Investment and Jobs Act and delay the effective date to allow market participants to conform to any new requirements.
- On December 23, 2022, more than a year after the Infrastructure Investment and Jobs Act was signed into law, Treasury released guidance stating that brokers are not required to report the additional information required until final regulations are issued and much needed clarity is provided on section 80603.
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