A US Congressman just introduced the ‘Crypto-Currency Act of 2020’ in an aim to establish new regulation for the digital currencies. The bill was tabled by Representative Paul Gosar (R-AZ) on March 9 and features a variety of regulations for blockchain-based assets.
The newly introduced bill is the latest regulatory framework seeking to establish the terms of engagement for US citizens in the digital assets space. It proposes to categorise digital assets into three broad classes including crypto-commodities, crypto-currencies, and crypto-securities. According to Gosar, the breakdown of the digital assets into different categories will provide clarity and legitimacy to all crypto assets in the US.
Each of these assets governance will fall under separate agencies of the US government. The Commodity Futures Trading Commission (CFTC) will regulate crypto-commodities while the Secretary of the Treasury will govern crypto-currencies via the Finncial Crimes Enforcement Network (FinCEN). Crypto-securities will fall under the Securities and Exchange Commission (SEC) according to Gosar’s proposal.
The proposal’s categorisation of the digital assets draws some interesting distinction among what is now broadly referred to as cryptocurrencies. For instance, the language of the bill suggests that a digital asset like Bitcoin falls under the crypto-commodity category rather than crypto-currency. the bill classifies crypto-currency as ‘representations of United States currency or synthetic derivatives’. This definition therefore suggests stablecoins like Tether are more befitting to fall under the crypto-currency category.
The language and definition of crypto-securities is rather straightforward describing them as ‘all debt, equity, and derivative instruments that rest on a blockchain or decentralized cryptographic ledger’. This clear classification will provide clarity especially in the tokenization area like Initial Coin Offerings (ICOs) and Security Token Offerings (STOs).
Gosar will solely sponsor the bill thus breaking normal congressional practice of having cosponsors. According to Gosar’s team, the representative looks to gaining more support after its introduction. They further alluded to engaging the crypto industry leaders to garner their support before seeking legislative approval. Gosar’s Communications Director, Ben Goldey, explained this saying
Since this is such a niche issue, we worked with stakeholders and outside groups/experts to get a good sense of the kind of clarity that the industry needed. We chose to gather stakeholder support before working toward cosponsors.
The Crypto-Currency Act of 2020 adds to the list of draft bills that have been introduced to the US Congress as regulators seek to establish proper legislation to govern digital assets.
Image courtesy of Pixabay
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