During the final day of the G7 summit in Japan, US President Joe Biden made a firm statement regarding the ongoing debt default discussions, declaring his refusal to support a deal that benefits tax evaders and individuals involved in cryptocurrency trading. President Biden stated, “I will not approve an agreement that shields wealthy tax cheats and crypto traders while jeopardizing food assistance for almost a million Americans.”
His remarks directly opposed a bipartisan debt ceiling arrangement with Republican leaders, which he claims would primarily favor crypto traders and other beneficiaries. The proposed safeguards for cryptocurrency and stock investors revolve around a practice known as tax loss harvesting. This process involves selling an asset at a loss and immediately repurchasing it, allowing investors to offset capital gains and reduce their tax liabilities.
The impasse between the two sides of the American political spectrum regarding negotiations over the federal budget and the debt ceiling persists. Without a new budget agreement, the United States could potentially face a cash shortage as early as next month, as the national debt climbs toward an alarming $32 trillion.
President Biden previously criticized “wealthy crypto investors” this month as part of his plan to close tax loopholes. Americans and the crypto industry remain hopeful that a future administration and president elected in the November 2024 general election will adopt a more supportive stance towards the industry. Until then, the adversarial approach toward crypto is expected to continue, resulting in the departure of talent and innovation to more favorable jurisdictions abroad.
Moreover, the Biden administration has also proposed a 30% energy tax on crypto miners, which could further contribute to the ongoing exodus. Nevertheless, a glimmer of hope emerged at the recent Miami Bitcoin conference, where presidential candidate Robert F. Kennedy pledged his support for Bitcoin and the crypto industry in the United States.
