During a news conference at the end of the G7 summit in Hiroshima, Japan, President Joe Biden spoke at length about his and fellow Democrats’ refusal to agree to a number of Republican demands amid ongoing negotiations over raising the nation’s debt ceiling. He also mentioned crypto.
“I’m not going to agree to a deal that protects wealthy tax cheats and crypto traders while putting food assistance at risk for nearly a hundred, well, I should mean, 1 million Americans,” Biden said Sunday at the annual gathering of some of the world’s largest economies.
His brief reference to crypto comes as the U.S. government reaches a Congress-imposed limit—perhaps as early as June 1—on how much it can borrow to pay its ongoing costs. If the U.S. can no longer borrow money, the country faces a potential default, which may result in higher interest rates, delayed Social Security payments, and job loss.
In a divided Congress—Democrats control the Senate and Republicans control the House—both parties have used the debt ceiling to try to extract concessions from each other. In March, the closing of a crypto tax loophole called a “wash sale,” or when investors quickly sell and then repurchase cryptocurrency to claim losses on tax returns, was reportedly part of debt ceiling negotiations. (Claiming losses from wash sales is banned for other asset classes.)
In May, Biden voiced support for eliminating tax loopholes for crypto, posting a graphic on Twitter that read: “We think Congress should cut tax loopholes that help wealthy crypto investors.”
We don’t have to guess what MAGA House Republicans value. They’re telling us. pic.twitter.com/BM6JGMEFeq
— President Biden (@POTUS) May 9, 2023
(It was unclear for some in the crypto industry, however, from where the $18 billion figure was sourced.)
Biden’s grouping of “crypto traders” with “wealthy tax cheats” also continues his administration’s periodic focus on the industry, which the White House has commented on as Congress continues to battle over bills to outline comprehensive crypto regulation.
In March 2022, Biden signed an executive order that outlined the executive branch’s approach to policymaking around digital assets. Later that year, in September, the White House released a framework for the “responsible development of digital assets.” And earlier this month, Biden released a proposal to tax U.S cryptomining firms 30% of the cost of electricity they use while mining.