Key lies in startups leaving! Venture capital firms eye infrastructure, crypto tax laws: U.S. may lose its dominant position in the dollar hegemony

The cryptocurrency amendment in the U.S. infrastructure bill has faced several setbacks and has not yet received unanimous approval during the Senate vote on Monday. Adam Cochran, data analyst and partner at venture capital firm Cinneamhain Ventures, believes that the issue is not about taxation, but rather the risk of the U.S. losing its dominance as a result.

Not a Tax Issue

Adam Cochran posted a series of tweets on Twitter, pointing out the worst-case scenario arising from the infrastructure bill, which could lead to the U.S. losing its leadership position by stifling blockchain startups. He stated:

It's not a tax issue. The crypto industry has always been willing to cooperate, including those holding FinCen, MSB licenses, and fiat exchanges are prepared to assist in reporting 1099 tax forms. The problem lies in the bill being too broad, creating too much uncertainty.

Courts Have the Final Say

There is a possibility of the bill being misused, and the crypto market can withstand any outcome except uncertainty. Cochran believes the bill creates a language that needs court interpretation, a language that Congress needs to debate.

Therefore, startups will move overseas to avoid uncertainty, leading to the outflow of investors, high-paying jobs, taxes, and talent. He emphasizes that excessively suppressing specific industries is absolutely wrong, especially when cryptocurrencies are used by tens of thousands of users.

While some worry that cryptocurrencies may threaten the dominance of the U.S. dollar, Cochran believes this is baseless:

Nothing exposes the dollar to risk more than anti-crypto legislation.

The Former Dominance of the U.S. Dollar

During the Industrial Revolution and the American Golden Age, the dollar dominated. However, high-paying blue-collar jobs moved overseas in the mid-1990s. Fortunately, the U.S. successfully captured early internet and fintech innovations, making it the global reserve currency. Nevertheless, a global reserve currency typically lasts around 100 years on average.

Not Bitcoin Replacing the Dollar

Cochran points out that the risk of cryptocurrencies to the dollar is not everyone starting to price things in Bitcoin but the rise of local fiat currencies in emerging startup nations. He explains:

Blockchain may emerge in e-commerce, finance, the internet, and other fields. Assuming startups all move abroad, these industries will operate in local fiat currencies. If the dollar collapses, it will either be due to geopolitical collapse, war, or failure to keep up with innovation, being replaced by other economies.

The U.S. seized internet startups and fundamentally changed the world, and Cochran believes blockchain technology is far more critical and has a broader impact than the internet.

In conclusion, all the turmoil is not about any specific actions the bill will take but about its continuous creation of a vague, uncertain environment. He emphasizes that this is a historic moment, even though it may not be apparent at the moment, and hopes that the voices of businesses will not be ignored or seen only as a reaction to increased taxes.