“Cryptocurrency brawl bogs down infrastructure bill, as Yellen and White House fight changes,” says the Washington Post in revealing the Treasury Secretary, 74 year old Janet Yellen, has been lobbying for an amendment that to those familiar with smart contracts code or cryptos makes no sense whatever.
The Rob Portman (R-Oh) and Mark Warner (D-Va) amendment excludes only Proof of Work (PoW) miners from tax reporting transfers over $10,000, so including by omission Proof of Stake (PoS) validators and crucially publishers of smart contract code.
Defi dapps like Compound therefore would need to report to IRS, but considering anyone can interact with open source smart contract code, it’s not clear how exactly that smart contract would get any needed information to report as there’s no permission or identification requirements to join the ethereum network because anyone can run it by just downloading the code.
Some therefore are interpreting the last minute addition to a 2,700 pages document mainly concerned with trains and boats, as a first step towards outright banning cryptos completely.
“If the technology makes it impossible to know people’s capital gains, then the technology should not exist,” Jason Furman, a former Obama administration economist, said.
How you turn that ‘shouldn’t’ into something enforceable is not clear, but the backlash has been intense against an act that effectively requires licensing for the publishing of code.
Some 15,000 calls to representatives have been made to urge them to vote against the Portman amendment which “bewilderingly,” according to the World Economic Forum, effectively requires permission to publish open source code.
“Cryptocurrency clash complicates infrastructure bill’s path forward,” says the Hill. A ‘paper’ that previously had an editorial calling for the banning of bitcoin.
“Biden-Backed Infrastructure Amendment Could Crush Cryptocurrency Industry,” says the Jewish Voice, speaking of “a ‘disastrous’ amendment backed by President Joe Biden and proposed by Sen. Rob Portman.”
“Ohio Senate Republican candidate J.D. Vance blasted on Friday a proposed cryptocurrency regulation from Sens. Rob Portman (R-OH), Mark Warner (D-VA), and Kyrsten Sinema (D-AZ), which President Joe Biden has backed, saying it would punish Ohioans to big tech’s benefit,” says Breitbart.
“The Senate tried to fast-track the infrastructure bill – which appears to have the votes to pass – via unanimous consent on Thursday night. But the cryptocurrency disagreement held up negotiations and Sen. Bill Hagerty, R-Tenn., refused to consent to expedited passage.
That means the Senate is likely to vote to end debate on the bill Saturday and on final passage for it early next week,” says Fox.
The ratcheting up of this matter to the top of the political agenda may indicate this is a 1995 moment with America at a crucial crossroad on it’s approach towards a new financial technology with great potential.
If the Lummis amendment wins which excludes coders and validators from liability, then the smart contracts defi space will have the freedom to experiment and innovate as much as internet entrepreneurs could do at the dawn of the internet age to the great benefit of all.
If the Biden and Yellen backed Portman amendment wins, which by omission holds Proof of Stake validators and smart contract coders as liable, then the United States risks undermining the authority of Congress as the law would be too ridiculous to comply with and would be assumed as ignorant at best, or sinister at the dangerous worst.
Europe would jump at the opportunity to lead the world of tomorrow with its more decentralized governance and round table ensuring the elected would not consider ruling without consent to a point where their authority is not recognized.
And seeing as due to its inbuilt design there are no permission requirements to publish on ethereum, in line with the first amendment, not recognizing Congressional authority would be far too easy and even a patriotic duty as no one would want the second amendment to protect the first.
Biden and Yellen therefore have gotten themselves in a mess presumably primarily due to their very old age which known nothing of PoW or PoS or that smart contracts are open source code like what you find on Github.
That mess is now prime time news, with America’s elected so having to decide whether they stand with the principles that enshrine their nation, or whether they are willing to risk what can be a very dangerous proposition that suggests Congress no longer operates on consent as it knowingly enacts against the constitution which protects free speech with the Supreme Court stating code is speech.
Revealing such face to this generation would be very brave indeed, which is why we’d like to see the neutral Lummis amendment pass as otherwise Congress would set in force certain potentially even uncontrollable forces with the consequences unknown because fundamentally we’re talking freedom itself. A freedom we have taken because we have invented it in such a way that Congress has no authority without consent.