From Ashton Kutcher to Elon Musk and Jack Dorsey, fanatical Bitcoin investors are poised to take a larger role in politics
- Crypto investors are poised to take a more active role in US politics.
- In August, the crypto community took a stand against a tax provision in the infrastructure bill.
- While the group was unable to amend the bill, the effort points to future clashes in Washington.
Crypto investors have begun to take a political stance in recent months as the US government looks to pursue a more stringent policy on the taxation of decentralized currencies like Bitcoin.
Last week, the Senate passed a $1 trillion infrastructure bill that included a provision that would increase tax enforcement on transactions involving cryptocurrencies.
The provision spurred a showdown in Washington DC, pushing senators, crypto investors, social media influencers, and celebrities alike to mobilize. Ahead of the decision, the crypto community generated tens of thousands of calls to Congress, demanding the new tax rules be amended.
Tesla CEO Elon Musk called the tax provisions "hasty," in a thread on the new tax rules that was started by Coinbase CEO Brian Armstrong, who called the policy "disastrous."
-Elon Musk (@elonmusk) August 6, 2021
Musk has been outspoken about his support for crypto, in particular Bitcoin. Earlier this year, the CEO temporarily allowed customers to use Bitcoin to buy Teslas - a major step toward entrenching the digital asset into the US financial system.
Ashton Kutcher and Twitter and Square CEO Jack Dorsey also took to Twitter to call for people to take action against the bill. Dorsey said the new reporting rules would push innovation out of the US.
-jack⚡️ (@jack) August 8, 2021
While the crypto community was able to hold up the bill for about a week, they were ultimately unsuccessful in their attempts to amend the bill. But experts say the movement galvanized the community's role in politics, and paved the way for digital assets to become a more permanent part of the financial system.
The main issue that crypto enthusiasts had with the bill centered around the loose language used to define the role of a "crypto broker," which could allow people to interpret as involving any type of crypto transaction.
Several lawmakers, including Senators Pat Toomey, R-Pa., and Cynthia Lummis, R-Wyo. took a stand against the wording, calling it "unworkable and onerous." Other political voices quickly followed, calling investors to action on social media.
While the language around the crypto tax is controversial, Cowen Group managing director Jaret Seiberg said in an analyst note on Tuesday that the bill is a sign crypto is here to stay.
"The tax reporting language is one of the clearest indications that Washington is prepared to accept crypto as a permanent part of the financial ecosystem," he wrote. " [It] now sees crypto as a real product that is worthy of government attention, [which] tells us that Washington is done looking at ways to end crypto."
The Wall Street Journal reported that lobbying around cryptocurrency is on the rise. From January to the end of June, crypto companies and organizations spent about double what they had in previous years. Major crypto companies have also begun to hire policy officers with government connections, hinting at more clashes to come.
"The crypto community has really kind of come out as a powerful constituent," Armstrong said on an earnings call last week. "They're now actually becoming a vocal participant in the policy efforts around the U.S."
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