- White House crypto advisor Patrick Witt revealed that there’s ongoing chatter in Congress about new crypto tax provisions following the passage of the Clarity Act.
The Clarity Act is progressing toward its scheduled Senate floor markup in the last two weeks of April. Coinbase giving the thumbs-up to the new language in the pending legislation signals a move in that direction.
However, several members of the crypto community expressed skepticism about the real purpose behind efforts to speed up several crypto-related pieces of legislation. While supporters of the bill argued that they’re seeking to secure the future of digital assets against hostile regulators, others viewed it as the government’s attempt to control the crypto industry so it could figure out a way to tax it.
Patrick Witt, Executive Director of the President’s Council of Advisors for Digital Assets, recently hinted that Congress is eyeing the introduction of crypto tax provisions next.
New Discussions Around Crypto Tax Rules After Clarity Act
Witt didn’t explicitly confirm whether he spoke about the matter with the House Committee on Ways and Means. However, he revealed in an interview that there’s an ongoing chatter in Congress about integrating new crypto tax rules in an upcoming reconciliation package by fall.
The White House official claimed that the reconciliation package would allow the Senate and the House to revisit taxation rules beyond crypto. Witt discussed it in passing with Crypto in America, as he believes the public has been so engrossed in the Clarity Act, particularly the talks surrounding stablecoin yields, that they have overlooked the bigger picture.
Overall, US President Donald Trump’s digital assets advisor said more crypto legislation will follow once the Clarity Act passes.
Resolving the Stablecoin Yield Bottleneck in the Clarity Act
Witt underscored the importance of resolving the stablecoin yield debate in the pending Clarity Act before proceeding with its other provisions. He explained that breaking the stalemate caused by the issue is the only way forward.
Last week, the White House Council of Economic Advisers (CEA) released a report exploring the potential impact of yield restrictions on idle stablecoin holdings on bank lending. The paper responded to the banking sector’s contention that allowing interest payments on stablecoin balances would trigger a deposit flight of over $6 trillion, potentially harming the lending industry.
CEA found that blocking stablecoin yields has only a “quantitatively small” effect on contract lending. It found that it would have only a 0.02% impact on a baseline scenario. Not even the worst-case scenario could justify claims of a positive return.
