Biden’s 2023 budget will raise $4.9 billion in 2022, $11 billion by 2032 by updating crypto rules

Patrick Semansky/AP/Shutterstock / Patrick Semansky/AP/Shutterstock

The Biden administration released its 2023 budget on March 28 — a budget that includes the practice of modernizing the rules for digital assets. Such a move would generate $4.9 billion in revenue in 2023, according to budget documentation.

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The new rules would also require the reporting of information by certain financial institutions – and digital asset brokers – for information exchange purposes, require the reporting of certain taxpayers trading foreign digital asset accounts, and change the rules of mark-to-market to include digital assets. . In total, the administration expects these rules to generate $10.9 billion by 2032.

The Treasury Department released an explanation of the proposals in which it states that “tax evasion using digital assets is a rapidly growing problem. Since the industry is all-digital, taxpayers can transact with offshore digital asset exchanges and wallet providers without leaving the United States.

“In order to ensure that the United States can benefit from a global framework for automatic exchange of information regarding offshore digital assets and receive information on American beneficial owners, it is essential that the United States provide reciprocal information on the foreign beneficial owners of certain entities. transact digital assets with US brokers,” the Treasury said.

The budget also aims to expand the ability of the Department of Justice (DOJ) to pursue cyber threats through investments that support a multi-year effort to build cyber investigative capabilities in FBI field divisions nationwide.

“These investments include an additional $52 million for more officers, enhanced response capabilities, and enhanced intelligence gathering and analysis capabilities. These investments are consistent with the administration’s anti-ransomware strategy that emphasizes disruptive activity and combating the misuse of cryptocurrency,” the budget document reads in part.

The $1 trillion Infrastructure Investment and Jobs Act, which passed in August 2021, also included a provision on the crypto industry, as GOBankingRates previously reported. These new requirements could generate $28 billion in tax revenue.

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The provision in question expands the definition of a broker, describing the category as follows: “any person who (for remuneration) is engaged to regularly provide any service effecting transfers of digital assets on behalf of another person”, according to the text of the bill. This language would require crypto brokers to report customer information to the Internal Revenue Service. This provision may notably not exclude miners, software developers, stakers and others in the crypto economy who do not have customers, according to CNBC.

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About the Author

Yael Bizouati-Kennedy is a full-time financial journalist and has written for several publications, including Dow Jones, The Financial Times Group, Bloomberg and Business Insider. She has also worked as a VP/Senior Content Writer for major New York-based financial firms, including New York Life and MSCI. Yael is now independent and most recently co-authored the book “Blockchain for Medical Research: Accelerating Trust in Healthcare”, with Dr. Sean Manion. (CRC Press, April 2020) She holds two master’s degrees, including one in journalism from New York University and one in Russian studies from Toulouse-Jean Jaurès University, France.

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