New Draft Bill Aiming to Classify Crypto Assets Introduced in US Congress
U.S. Congressman introduces bill which aims to bring regulatory clarity to cryptocurrency industry.
Paul Gosar, an Arizona Congressman, has introduced a draft bill, aimed at finally bringing regulatory clarity to the cryptocurrency industry in the United States, according to a Forbes article published on Dec. 19. The Crypto-Currency Act of 2020 sets out which Federal agencies should regulate each type of crypto assets.
Three flavors of crypto asset
One of the key things that the draft bill does is define three types of crypto asset; crypto commodities, crypto currencies, and crypto securities, per a discussion draft of the proposed bill.
Crypto-commodities are defined as economic goods or services, stored on a blockchain, with fungibility and which the market treats with no regard as to who produced it.
Crypto-currencies are defined as representations of U.S. currency or synthetic derivatives resting on a blockchain. This covers reserve-backed stablecoins, and currencies determined by decentralized oracles or smart contracts.
Crypto-securities cover all debt, equity and derivative instruments on a blockchain, other than those which are operated and registered as complaint money services businesses.
Not ‘One Federal Crypto Regulator’ to rule them all
Each type of crypto-asset would fall under the jurisdiction of a different regulatory body, to act as the ‘Federal Crypto Regulator’ or ‘Federal Digital Asset Regulator’ for that type.
As might be expected, the Commodity Futures Trading Commission (CFTC) would be the agency in charge of crypto-commodities, and the Securities and Exchange Commission (SEC) would cover crypto-securities.
The Financial Crimes Enforcement Network (FinCEN) would then be left to regulate crypto-currencies.
Uncertainty currently stifling innovation
While it remains to be seen how far the bill progresses, it is likely to receive support from the cryptocurrency industry which has been calling for regulatory clarity for some time.
As Cointelegraph reported, the EU’s Fifth Anti Money Laundering Directive (5AMLD) is set to come into force on Jan. 10, 2020, bringing regulatory clarity to the industry on the other side of the Atlantic.