The process to regulate the cryptocurrencies have been initialized in the US Parliament.
On March 9, 2020, the Republic Congressman Paul Gosar of Arizona presented the “Cryptocurrency Act of 2020” before the house.
Will the bill help to regulate Cryptocurrency? Will it harness the activities?
Why is Bill Required?
As we all are familiar with the fact that there are no clear guidelines nor a dedicated regulator to have a close look to monitor cryptocurrencies. Adding to this, there’s no clear definition of cryptocurrencies, its types, uses and implications on the market. Widespread confusion has led due to a lack of support for such businesses, investors and entrepreneurs. The new bill which is tabbed would uproot these confusions providing an agency to streamline the crypto market.
The proposed Crypto Act of 2020
Bill proposed by Gosar, mainly divides cryptocurrencies into three parts and assigned their respective regulatory bodies to govern them,
- Crypto-Commodity governed by Commodity Futures Trading Commission (CFTC).
- Crypto-Currency governed by the Secretary of the Treasury via the Financial Crimes Enforcement Network (FinCEN).
- Crypto-Security governed by the Securities and Exchange Commission (SEC).
The proposal further says that cryptocurrency represents U.S. currency just like a stable coin. The definition will, therefore, bring coins like Tether (USDT) under the governing control of the U.S. Treasury.
Bitcoin will be covered under Crypto commodities rather than cryptocurrency whereas crypto securities would be Blockchain-based or decentralized equity, debt or derivative instruments.
With the Non-Fungible tokens are concerned, Bill makes no mention of it.
The Drafting of the Bill
Paul Gosar, went on to present this bill solely without any co-sponsors which is a typical congressional practice. The Assistant to Gosar, Will Stechschulte reported to Cointelegraph that,
“For Introduction, it’s going to be congressman gosar. [….] After the introduction, we’re hoping to garner some serious support.”
The communications director for Gosar, Ben Goldey emphasized the importance of interaction with the industry prior to getting involved with the drafting. He said,“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.”
Erik Finman one of the investors in Bitcoin also worked closely in drafting the bill. He had initially contacted the Gosar’s team to work together as he believed this move was brave enough to withstand anything. Replying to the leaked bill, Finman said
“That bill that leaked, we were experimenting with a couple of things, that was our second draft. We’re thirty-two versions away from that.”
On the final note, expectations on this bill are as high as skies, as the regulation was much needed to end the confusion. Many countries globally also felt the necessity of monitoring the crypto market for a smooth flow of funds without allowing any illegal entities to flourish.
The honorable Supreme Court of India recently upheld the restrictions imposed by RBI on Bitcoins in 2018.
Hopefully, many countries should also come up with these bills to regulate Crypto Market.