Policymakers Overlook Crypto Tax Revenue for Infrastructure

According to a BeinCrypto report, the crypto industry's mergers and acquisitions (M&A) activity surged to an all-time high of $10 billion in the third quarter of 2025, driven by institutional participation and a pro-crypto regulatory environment. That report underscores a structural shift in how digital assets integrate into traditional finance, with firms prioritizing compliance, payment infrastructure, and treasury management to navigate volatility. Meanwhile, venture capital funding remained robust, with Coinbase's $375 million acquisition of on-chain investment platform Echo and Pave Bank's $39 million Series A round highlighting continued investor confidence, according to a crypto.news article.

Despite the crypto sector's financial dynamism, there is no direct evidence that taxes levied on cryptocurrency transactions are funding public infrastructure projects. For instance, Hitachi Ltd.'s recent Memorandum of Understanding with the U.S. Department of Commerce focuses on energy infrastructure and AI advancements but is unrelated to crypto taxation, as noted in a MarketScreener article. Similarly, Japan's $550 billion investment package targeting U.S. energy and transportation projects emphasizes domestic and allied economic security rather than crypto-derived revenue, according to a Nikkei interview. These initiatives reflect broader geopolitical and industrial strategies, not cryptocurrency tax allocations.

Crypto-related funding continues to flow into innovation, with platforms like Bluwhale and BitcoinOS securing $10 million rounds to develop decentralized finance tools and blockchain infrastructure, as reported by crypto.news. However, these investments are distinct from public infrastructure spending, which typically relies on general tax revenues or targeted bonds. The absence of explicit links between crypto taxes and infrastructure projects highlights a policy gap: while the sector generates significant economic activity, regulatory frameworks have yet to channel its tax base into public goods.

Recent geopolitical developments, such as confirmed talks between U.S. President Donald Trump and Chinese leader Xi Jinping, have further stabilized crypto markets in the short term, according to Barron's coverage. Bitcoin rose 1.6% following the news, illustrating how macroeconomic factors influence digital asset valuations. Yet, even as crypto wealth grows, policymakers have not explicitly tied its taxation to infrastructure financing—a contrast to traditional sectors like energy, where tax incentives and levies often fund grid modernization or green energy projects, as discussed in the MarketScreener article.