US Congressman Revamps Proposal to Legitimize Bitcoin (BTC) and Other Crypto Assets
On Monday, representative Paul Gosar (R-AZ) introduced the latest proposal that aims to give clarity and legitimacy to Bitcoin (BTC) and digital assets. The Crypto-Currency Act of 2020 is attempting to address a number of regulatory issues for cryptocurrencies.
Currently, the US has no comprehensive framework for cryptocurrencies to support related businesses, entrepreneurs or investors. The lack of clarity continues to cast some confusion over what a cryptocurrency is, how one may differ from another, and which US regulator should oversee Bitcoin versus Tether versus Ethereum. Gosar’s bill, an updated version of a proposal that leaked in December, attempts to answer these questions.
According to the new draft, regulators would be tasked with categorizing digital assets into three distinct categories: crypto-commodity, crypto-currency and crypto-security. The approach would put the three US regulators covering commodities, currencies and securities – the Commodity Futures Trading Commission (CFTC), the Secretary of the Treasury and the Securities and Exchange Commission (SEC) – in charge of different digital assets.
The bill defines “crypto-currency” as a representation of a US currency, such as a stablecoin, as opposed to Bitcoin, which is not backed by any government and does not represent any national currency. Under the proposal, Tether (USDT), USD Coin (USDC), TrueUSD (TUSD) and similar digital assets pegged to the US dollar would be governed by the US Treasury through the Financial Crimes Enforcement Network (FinCEN).
Crypto-commodities are economic goods or services that are on a blockchain or decentralized cryptographic ledger. This definition appears to apply to digital assets such as Bitcoin.
Crypto-securities are defined as “all debt, equity, and derivative instruments that rest on a blockchain or decentralized cryptographic ledger.”
Regulators around the world continue to grapple with crypto assets and how to protect consumers, switching course and pushing for more clarity. The Supreme Court of India recently struck down a circular issued by India’s central bank, the Reserve Bank of India, which banned commercial banks from offering any services to crypto exchanges and other crypto-related businesses.
In South Korea, regulators approved an amendment to legalize cryptocurrency trading and holding, laying the groundwork for a comprehensive regulatory framework. In Germany, policymakers officially classified Bitcoin and cryptocurrencies as financial instruments.
You can check out the latest proposal for the Crypto-Currency Act of 2020 here.
Featured Image: Shutterstock/W. Scott McGill
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