Multiple projects jointly establish the Proof of Stake Alliance, committed to engaging in dialogue with regulatory bodies.

Multiple blockchain projects are forming industry associations to provide legislators and regulatory agencies with relevant knowledge about blockchain technology and proof of stake mechanisms, with a focus on tax issues related to proof of stake reward mechanisms.

Due to the uncertainty in the U.S. Congress regarding the regulation of the crypto market, regulators and lawmakers also have limited understanding of early-stage technology. In light of this, the Interchain Foundation, Blockfolio, harmony, and 12 other blockchain projects have jointly formed the Proof of Stake Alliance (POSA) to explain blockchain technology to regulators and seek permission.

Proof of Stake Alliance (POSA)

Founder of the alliance, Evan Weiss, stated that despite the lack of understanding of blockchain technology in Congress, many blockchain projects are eager to communicate with regulators. He mentioned:

We want to sit down and have a good conversation with regulators and policymakers. I will bring our alliance members to give them the opportunity to start conversations with these different regulatory bodies.

One key area of concern for the alliance is taxation on reward mechanisms. Weiss pointed out that many alliance members' projects are based on the Proof of Stake (POS) mechanism and they are concerned about the lack of clear guidance on taxation related to reward mechanisms.

Founder of TQ Tezos, Jacob Arluck, believes:

One of the things we are doing is trying to pursue clarity in regulation, which will make it more consistent for users running nodes and there will be a clear way to reward them.

According to previous reports by ABM, the Internal Revenue Service (IRS) is trying to identify potential cryptocurrency transactions by taxpayers and urging cryptocurrency investors to report their holdings of crypto assets, coincidentally, the Proof of Stake Alliance was established just a few days after this news broke.

In fact, the IRS's cryptocurrency tax principles are still based on guidelines issued in 2014. Therefore, the alliance believes that the 2014 guidelines have not kept pace with the rapid development of blockchain technology and may not be able to regulate the rewards obtained by node users.

A report pointed out that many projects are trying to send strong signals to lawmakers across the United States. However, there have been no significant changes. Most policymakers cannot even understand Bitcoin, let alone complex Proof of Stake projects. Therefore, the pursuit of reasonable and clear regulation still requires time.

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