Last week Tuesday, the United States House of Senate passed a $1 trillion infrastructure bill which has been the talk of the cryptocurrency community, due to an ambiguous definition of the term “broker” in the bill. This bill could have a potential ripple effect on stakeholders in the U.S. and abroad.
How does the bill affect cryptocurrency in the U.S?
It was stated that the Biden Infrastructure bill is meant to direct billions of dollars to modernize roads, bridges and transit systems in the U.S while expanding high-speed internet systems and the nation’s network of electric vehicle charging stations.
To pay for the bill, a new plan was formulated to impose stricter tax-reporting requirements for cryptocurrency brokers which would bring in an estimated $28 billion in 10 years. This makes it the biggest revenue raiser in the infrastructure bill.
While speaking to CNBC, the CEO of FTX exchange, Sam Bankman-Fried stated that it is totally reasonable for cryptocurrency exchanges to file tax reports on behalf of their customers. However, he further stressed that the language of the bill is fairly vague and basically applies to anyone who is making some money facilitating blockchain transfers. This means that individuals who are miners or wallet developers could be taxed the same way as a centralized cryptocurrency exchange.
Despite some criticism from the cryptocurrency community, Kristin Smith, the Executive Director of the Blockchain Association admits that the legislative language is not perfect. However, “The collective show of force from advocacy groups, business leaders and think tanks was like no other thing I have experienced in my 20 years in Washington D.C… We went from zero to sixty overnight and caught the attention of the entire policy-making class in Washington.”
How can Nigeria benefit from this ?
Ted Cruz, a United States senator, tweeted his opinion about the bill stating, “The Senate is on the verge of passing legislation that would be TERRIBLE for cryptocurrency. The infrastructure deal contains DANGEROUS provisions that would devastate crypto and blockchain innovation.”
Senator Cruz further called on cryptocurrency supporters to speak up against the provisions in the bill that affect cryptocurrency. Yash Patel, general partner at Telstra Ventures stated that he thinks the United States will experience crypto innovation move abroad stating, “I think it’s a very real possibility investors will look outside the U.S. when investing in crypto.”
If there is a possibility that cryptocurrency innovation moves away from America, Nigeria is a target market to most blockchain and crypto companies according to Adebayo Juwon, the business development manager for FTX exchange Africa. In an interview with Nairametrics, He stated, “There has been tremendous growth in crypto adoption in Nigeria in recent months… Crypto exchanges and media companies have visible marketing operations here in Nigeria, which at this point is a necessity.”
Another respondent, Mohammed Elelu-Bashir, Co-Founder and Chief Operating Officer at Project Seed, held a similar opinion stating, “Due to Nigeria’s huge consumer market, American innovators should be interested in opening a store in Nigeria. According to statisticsTimes.com, as of August 2020, the population of Africa is 1.34 billion. Nigeria is the most populous country in Africa, with a population of 200 million, which means that one in 6-7 Africans is Nigerian. With these numbers, Nigeria has the manpower and workforce that can help any business flourish. Nigeria is also one of the few countries in the world with rich mineral resources, most of which have not been developed.”
Speaking on how Nigeria can benefit from these innovators, Adebayo had this to say:
“The effects of having these blockchain and crypto companies running their operations in Nigeria are mostly positive. It will provide job opportunities, multiple sources of income for enthusiasts, a medium to receive payments in foreign currencies etc. Nevertheless, we need to take note, that Nigeria is also void in crypto regulation, with no clear path in which these companies can follow to establish their business physically in Nigeria. Hence, operating remotely is the best way to operate in “no clear” regulation zones like Nigeria.”
Although the government, in February, banned banks from processing cryptocurrency transactions, there are some interesting facts you should know. According to data from Google Trends, Nigeria still ranks #1 by search interest for the keyword “Bitcoin.”
Useful Tulips also states that peer-to-peer (P2P) Bitcoin trading denominated in the Nigerian naira has steadily increased in 2021, with Nigeria ranking behind only the United States as the second-largest market for P2P BTC trading.
Finally, a report by Binance, states that Nigeria is leading the charge as the #1 country leading cryptocurrency adoption.