Kiffmeister’s #Fintech Daily Digest (08/02/2021)*

Updated US Infrastructure Bill Narrows Crypto Reporting Requirement

An updated version of the U.S. Senate’s infrastructure bill narrows the definition of “broker” for the purposes of crypto tax collection, but stops short of specifying that only companies that provide services for customers qualify. An earlier version of the bill sought to help pay for itself by boosting information reporting requirements and broadening the definition of a “broker” for tax purposes to include any parties that might interact with crypto. An updated version now does not explicitly include decentralized exchanges, but it also doesn’t explicitly exclude miners, node operators, software developers or similar parties.

Bank for International Settlements (BIS) on regulating big techs in finance

“Big tech firms entering financial services can scale up rapidly with user data from their existing business lines in e-commerce and social media, and by harnessing the inherent network effects in digital services. In addition to traditional policy concerns such as financial risks, consumer protection and operational resilience, the entry of big techs into financial services gives rise to new challenges surrounding the concentration of market power and data governance. The current framework for regulating financial services follows an activities-based approach where providers must hold licences for specific business lines. There is scope to address the new policy challenges by developing specific entity-based rules, as proposed in several key jurisdictions – notably the European Union, China and the United States.”

Square to Buy Afterpay for $29 Billion to Tap Younger Users

Square, the digital-payments platform led by Twitter founder Jack Dorsey, agreed to buy Australian buy-now, pay-later company Afterpay Ltd. for $29 billion in an all-stock deal. Square said the buy-now, pay-later concept represents a chance to capitalize on a shift away from traditional credit, especially among younger consumers. The plan is for Square to integrate Afterpay into both its consumer Cash App, and its Seller product for small businesses. 

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