What does the US budget mean for cryptocurrencies?

US President Joe Biden’s budget proposal, released on Friday, includes new reporting requirements for crypto investors, requiring crypto exchanges to provide information about crypto assets.

The proposal comes amidst recognition from the US government surrounding the growing problem of tax evasion by those investing in crypto assets. The reforms hope to combat the current trend of investors using offshore crypto exchanges and digital wallets to avoid paying capital gains tax (CGT).

A second proposal, outlined in the budget report, aims to introduce “comprehensive financial account reporting”, which would require financial institutions to submit figures on transfers above US$600 in an effort to achieve tax compliance.

The spending outlined in the report aims to stimulate the US economy following the financial effects of the COVID-19 pandemic, which saw many US businesses close down due to the implementation of strict lockdown rules.In the aftermath following the release of President Biden’s budget report, the bull market appeared to be unaffected as the economic outlook remains positive.

A report released by the Cambridge Center for Alternative Finance found that Bitcoin mining requires the same amount of energy annually as some small countries.