Infrastructure Bill & Crypto Regulation Will Grow Blockchain
On Tuesday, the US Senate gave overwhelming bipartisan approval to a $1 trillion infrastructure bill that is set to have a significant impact on the world of blockchain technology and cryptocurrency. Alongside rebuilding the nation’s roads and bridges, this bill will undertake a wealth of technology initiatives, including broadband access programs, electric vehicle charging stations, and cybersecurity.
Of the trillion dollars, $42.5 billion are allocated to fund the expansion of access to internet services to areas with the least amount of coverage, with another $14 billion going towards subsidizing internet costs for low-income individuals. By upgrading its digital infrastructure, the US stands at an important crossroads which could help mitigate the challenges posed by the advancement of technology in the 21st century as well as adjusting to a post-pandemic world. Basic hurdles that were faced during the COVID-19 pandemic such as public revenue collection, adequate distribution of unemployment money, and the technological complexity that came with contact tracing the virus are all areas that blockchain technology addresses, and an expanded broadband infrastructure will enable.
The token-powered decentralized telecommunications project Helium has created a foundation for businesses to build out massive, cost-efficient wireless infrastructures. Dubbed “the people’s network,” Helium’s hotspots around the country will greatly benefit from this improved digital infrastructure. With so many tech companies leaning into blockchain technology, it is clear that the future of the world’s systems lies within this sophisticated piece of tech.
The bill also allocates $7.5 billion to aid in the installment of electric vehicle charging stations across the country. The big winner, in this case, would naturally be the leader in that market, Tesla. A timely development in line with infrastructure investments, the first blockchain-based electric vehicle grid integration standard has been released by automotive giants Honda and GM. Dubbed The Mobility Open Blockchain Initiative (MOBI), this project works to incorporate blockchain technology into a decentralized charging system for electric vehicles and asserts that blockchain will play a crucial part in revolutionizing the world of e-mobility, both by the reduction of costs and the creation of new revenue opportunities. In addition, given the inclusion of these items in the bill, the providers of these services will receive government-backed funding which will provide additional shareholder value for these firms.
As far as cybersecurity goes, nearly $2 billion will go to reinforcing revenant programs which the use of blockchain technology will enable quite possibly the best line of defense against malware and similar types of attacks. As we recently saw in the Colonial Pipeline ransomware attack, it was ultimately the use of blockchain technology that made the recovery of crypto payments possible. Showcasing the importance of blockchain tech in cybersecurity, IBM and Amazon have been steadily expanding their client solutions to the blockchain as a service due to its inherently secure and stable nature.
However, one thing that crypto investors are not too pleased with is the new tax provisions within the bill. The bill expands the definition of a “broker” broadly, identifying them as being “responsible for and regularly providing any service effectuating transfers of digital assets on behalf of another person,” and making them subject to tax reporting. That description however includes crypto miners who do not have customers, making it difficult (or, impossible) for them to fill out the requisite documents. Moreover, the issue of data privacy comes into question since “The mandate to collect names, addresses, and transactions of customers mean almost every company even tangentially related to cryptocurrency may suddenly be forced to surveil their users,” as per the digital rights group. Electronic Frontier Foundation (EFF). This would greatly compromise one of the cryptocurrencies’ most attractive features: anonymity.
The bill also does not adequately differentiate between a broker and an exchange, two very distinct entities within the crypto world. A broker sets the price, while an exchange has multiple buyers and sellers placing offers to buy and sell simultaneously. Exchanges collect personal details of users and report to the IRS.
Nevertheless, this infrastructure bill is just the beginning of realizing the potential of blockchain technology and how it can impact our world.