US lawmaker is most concerned about Treasury's response to crypto

Published at: Oct. 11, 2021

Wyoming Senator Cynthia Lummis said the Treasury Department may be more of a threat to innovation in blockchain and cryptocurrencies in the United States than the Securities and Exchange Commission or the Commodity Futures Trading Commission.

Speaking at the Texas Blockchain Summit in Austin on Friday, Lummis said her recent concerns with the federal agency came from the language concerning brokers of cryptocurrency in the infrastructure bill currently at the center of debate in Congress — Treasury Secretary Janet Yellen has expressed her support of the legislation. Under the wording passed by the Senate in August, brokers would have to report digital asset transactions worth more than $10,000 to the Internal Revenue Service.

“The definition that was proposed showed a fundamental misunderstanding of Bitcoin and other digital assets,” said Lummis, who claimed many brokers under the bill with little to no knowledge of their clients would not have the information necessary to file reports.

Exactly 3% of the U.S. Senate was in attendance at the Texas Blockchain Summit. Texas Senator Ted Cruz spoke on Bitcoin (BTC) mining being used to monetize energy created through oil and gas extraction rather than “flaring” it — burning the excess off as wasted fuel. Cruz was responding to questions related to the state’s power grid during a severe winter storm in February when the senator left Texas for a brief trip to Cancun.

While Cruz focused mainly on energy concerns, fellow Senators John Cornyn and Lummis both implied the key to avoiding misunderstandings in legislation like the crypto amendment to infrastructure bill depended on engagement from the public rather than relying on lawmakers to educate themselves on the subject. According to Cornyn, the language in the infrastructure bill was a “little bit of a surprise” to members of Congress who didn’t have the knowledge necessary to speak on the subject.

Cruz claimed “there are not five members of the U.S. Senate who could tell you what Bitcoin is,” but Lummis said she observed “enough understanding” following the debate over infrastructure that the language on crypto was likely to be amended in the House version of the bill. Congress is currently struggling to pass long-term legislation surrounding infrastructure, budget reconciliation and the debt ceiling.

“I’ve worked with members of both parties who didn’t have any interest in Bitcoin and digital assets and now we know each other, and now we talk regularly about this,” said Lummis. “I do think there will be some changes to that language, but it’s beginning to show a pattern in my mind by the Treasury Department, the IRS, that we’re really going to have to work on keeping the heavy hand of government at bay.”

Originally scheduled for a vote before Sept. 27, the infrastructure bill, which passed in the Senate has been entangled with a $3.5 trillion House proposal in a political maneuver between progressive and moderate Democrats, coupled with Republican attempts to prevent the government from defaulting on its debt. Lawmakers will likely try to move forward this week.