U.S. Congressman Paul Gosar (R-AZ) has introduced a crypto bill intending to provide more clarity on the regulation of digital assets in the United States.
Introduced on March 9, the “Crypto-Currency Act of 2020,” seeks “to clarify which Federal agencies regulate digital assets,” and “to require those agencies to notify the public of any Federal licenses, certifications, or registrations required to create or to trade in such assets, and for other purposes.”
The bill categorizes crypto assets as falling in these three groups: crypto-commodity, crypto-currency, and crypto-security.
The Act defines a crypto commodity as a blockchain-based asset that has “full or substantial fungibility,” and which “the markets treat with no regard as to who produced [it].”
Crypto-currency in the bill is a digital asset that is a representation of the U.S currency or reserve-backed assets. This group would include stablecoins like Tether (USDT) and USD Coin (USDC). Crypto-securities are those digital assets that represent “all debt and equity that rest on [the] blockchain or decentralized cryptographic ledger.”
Bill seeks clarity in crypto regulation
According to the bill, there should be a “primary Federal digital asset regulator” for each of the categories above. Gosar’s bill wants the Commodity Futures Trading Commission (CFTC) to regulate crypto commodities.
In the Act, the Financial Crimes Enforcement Network (FinCEN) working under the Secretary of the Treasury will oversight crypto-currencies. Lastly, the Securities and Exchange Commission (SEC) is to be the primary regulator for crypto securities.
It is early to say what impact the proposal of a primary regulator will have. However, from the onset, it appears crypto businesses might have to watch out for this law if passed. More concerned could be crypto teams that have long held the opinion that the SEC lacks the mandate to regulate them.
Tracing of transactions
Part of the bill also wants to reinforce regulatory bodies in terms of tracing crypto-related transactions. It stipulates that FinCEN, under the authority of the Secretary of the Treasury, “shall issue rules to require each crypto-currency (including synthetic stablecoins) to allow for the tracing of transactions [made] in crypto-currency.”
Also, people involved in these transactions should be traced, just as it happens within the mainstream financial services sector.
Cryptocurrency regulation continues to gather speed around the world, with clarity one of the areas the crypto-community has called for over the years. Regulators in the U.K. and Italy have made recent moves concerning new crypto regulations.
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