A draft bill introduced by Arizona Congressman Paul Gosar would assist to crypto regulation by providing clarity regarding various aspects of the crypto industry.
Crypto regulation in the US
As per Forbes’ report, the Crypto-Currency Act of 2020 would outline the laws regarding digital assets and lay down a guideline for law enforcers on how to regulate various types of crypto assets.
The bill divides crypto assets into three categories; crypto-currencies, crypto-securities and crypto-commodities. The bill includes a definition for each type of asset that would allow law enforcing agencies to regulate them.
Crypto-currencies are defined as the crypto representation of US dollar or its derivatives through blockchain technology. This category includes assets such as stablecoins and currencies determined by smart contracts etc.
Crypto-securities include all equity, debt and other derivative instruments on a blockchain network. The category does not include those assets that are registered as complaint money services businesses.
Crypto-commodities are economic goods and services that are stored on a blockchain network. To be categorized as a commodity the asset must possess fungibility and should be treated with no regard as to who produced it.
Similarly, the duty of managing crypto regulation assets is not given to one financial regulator but divided into three parts. Each regulator would only regulate one type of crypto assets.
The Commodity Futures Trading Commission (CFTC) would be responsible for regulating crypto commodities while the Securities and Exchange Commission (SEC) would manage crypto securities. As such, crypto-currencies would fall under the jurisdiction of The Financial Crimes Enforcement Network (FinCEN).
The draft bill would give a huge boost to the crypto industry in the US as the current uncertainty regarding crypto regulation is stifling innovation. Investors are uncertain about the legality of these projects while businesses remain cautious about strict regulations. The bill if approved would provide great relief to the industry and likely boost adoption in the region.