Senator Toomey requested clarification from experts in the crypto community on best policies and practices. We submitted our vision and recommendations for an orange-pilled United States.
March 20, 2022
Bitcoin Today Coalition (BTC) Response to Senator Pat Toomey’s Request for Feedback on Clarifying Laws Around Cryptocurrency and Blockchain Technologies.
The Bitcoin Today Coalition appreciates the opportunity to submit ideas and proposals to
Senator Toomey and looks forward to future discussions. We are submitting this document to
ensure federal law supports the development of Digital Assets – including Bitcoin – and provides protections to the 46 million-plus Americans who own and use Bitcoin.1 In addition to individuals, public and private companies are holding Bitcoin on their balance sheets, and by innovating on top of the Bitcoin protocol are creating jobs and growth in America.
The Bitcoin Today Coalition seeks to make America the best place in the world to hold Bitcoin.
Through proper understanding and regulation of Digital Assets including Bitcoin, America will
continue to lead the world in innovation. Bitcoin enables global competitiveness, encourages
financial inclusion,2 is auditable,3 benefits public energy grids,4 and promotes human rights.5
1 NYDIG, "Bitcoin Banking Survey," 2021
2 Newsweek, "Governments Should Invest in the Bitcoin Network," 2021
3 CCI, “Analysis of Bitcoin in Illicit Finance,” 2021
4 NYDIG, “Bitcoin Net Zero,” 2021
5 Human Rights Foundation, Why Bitcoin Matters for Freedom,” 2021
Proposals in brief:
1. For accounting purposes, Private and Public Corporations who hold Bitcoin on balance sheets should have updated accounting direction.6
2. Tax incentives should be provided for Bitcoin miners using stranded energy7 sources, and Bitcoin miners who use technologies that promote efficiencies benefitting existing energy grids such as load balancing and emergency capacity.8
3. Bitcoin’s Layer 2 (e.g. the Lightning Network) transactions should receive equal legal treatment as on-chain Layer 1 transactions. Individual and routing Lightning nodes are not money transmitters or brokers.
4. Adjust language in Infrastructure Bill (H.R. 3864)9 to recognize that peer-to-peer Bitcoin transactions are recorded on the blockchain, and address unintended consequences in the language as written.
5. Strike the amendment to 26 USC §6050I10 as written in section 80603 of the Infrastructure Investment and Jobs Act, or repeal if enacted.11
6. Adjust language in Section 1391 of the Token Taxonomy Act12 to include Bitcoin as Certain Property in 1031 swap allowances, and to support the de minimis gains tax exemption of $600.
7. To the extent that Digital Asset Exchanges hold Bitcoin for customers, they should comply with CFTC requirements regarding segregation. Applying CFTC regulations to exchanges for designated commodities including Bitcoin provide requisite consumer protections.
8. Peer-to-peer Bitcoin transactions are protected as a key feature of the commodity, and cannot be compelled to route through a bank.
6 Microstrategy, Letter to the FASB, 2021
7 Wyoming HB 189, 2021
8 This Machine Greens,” 2021
9 H.R. 3864 Infrastructure Investment and Jobs Act, 2021
10 26 USC §6050I
11 Bitcoin Magazine, "The Proposal to Regulate Digital Asset Transactions Should be Struck", 2021
12 H.R. 1628 Token Taxonomy Proposal, Davidson 2021