Congressman Budd Defends Blockchain in Testimony to House Ways and Means Committee

"The bottom line is this is a national security issue and of utmost importance that we continue to develop this technology in the United States," said Congressman Budd.

AccessTimeIconJun 6, 2019 at 6:00 p.m. UTC
Updated Sep 13, 2021 at 9:17 a.m. UTC
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North Carolina Congressperson Ted Budd highlighted two bills he hopes will receive bipartisan support, The Cryptocurrency Tax Fairness Act and the Virtual Value Tax Fix of 2018, while speaking at the U.S. House Ways and Means Committee on June 4.

During his testimony, Budd called the development and protection of the domestic blockchain industry an issue of national security. Threats to this nascent industry come in the form of undue tax burdens, which can be eased through legislation.

Of specific interest? The Cryptocurrency Tax Fairness Act, a bipartisan effort from last congress, which Budd co-sponsored and is now reintroducing, will “extend the de minimis exemption for personal transactions in foreign currency to cover transactions and Blockchain tokens as well.”

The republican congressman also announced he will provide an updated version of his own legislation, The Virtual Value Tax Fix, to ensure that digital assets are recognized as property eligible for the like-kind exchange tax deferral under Section 10(31) of the Income-Tax Act.

Budd said that without like-kind exchange, the crypto industry is subject to the effective double taxation of blockchain-based transactions, be it a purchase or sale. He also called out the disproportionate record keeping burdens on taxpayers, as well as the cumulative deterrent impact on all blockchain-based activity from the foregoing consumer impacts.

“An effective sales tax of nearly 40% penalizes the use of digital units of commerce,” said Budd. “The use of digital assets is already treated as a sale of the asset, even though the economic reality of the transaction is a purchase of a simple consumer good.”

This is not first time Budd called upon Congress or the Commodity Futures Trading Commission (CFTC) for a bipartisan effort to better regulate the cryptocurrency industry. In his most recent speech, he also asked the government to work with trade groups like the Coin Center, the Blockchain Association, and the Chamber of Digital Commerce to further the interests of individuals and businesses.

Image via US Congress.

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