US Congress introduced a 2020 new bill regulating cryptocurrencies
The story of US cryptocurrency and blockchain regulation seems to have not ended.
The opposing position of US
Crypto and blockchain first became ‘hot news’ when the ICO boomed in 2017 and 2018. Since that time, the SEC has begun to pay attention to the possibility of selling unregulated securities tokens. Moreover, Facebook’s announcement of Libra has made the issue of regulating cryptocurrencies once again a focus for US regulators. However, although the discussions were still very lively, there was no firm conclusion.
The lack of clear directional rules has led many critics to expect the United States to lag behind other nations on the track for leadership in the fintech innovation space.
Commissioner Hester Peirce of the U.S. Securities and Exchange Commission (SEC) is crypto-friendly and is nicknamed “Crypto Mom.” She said Asia has a more open attitude towards crypto than the US. The reason is that Asia has been an important location for cryptocurrency exchanges and mining, as well as for retail investors. The countries in Asia also have a regulatory and talent advantage so that cryptocurrency investment will move to countries with clear and friendly rules.
Venture capital firm Andreessen Horowitz said US lawmakers are not very enthusiastic about crypto. The Deputy Minister of Finance expressed concern about money laundering for terrorism and financial intelligence and emphasized that global AML regulations need to be improved. Meanwhile, the SEC also has strict rules that practically killed the ICO market in the US.
However, this year, there are some brights for crypto in the United States. In September, several cryptocurrency companies (including Kraken, Bittrex, and Coinbase) are currently operating in the United States have jointly created a new governing body called the Cryptocurrency Rating Board (CRC). The purpose is to provide more transparency on the definition of different cryptocurrencies.
This is an attempt to give investors (as well as casual enthusiasts) a clear view about what kind of tokens they can trade freely without the supervision of different regulators.
The new US bill regulates cryptocurrencies
As 2019 nears the end, US lawmakers are introducing a bill that will provide an extensive legal framework for digital assets, including cryptocurrencies, as a way of responding to Introducing Facebook’s Libra Project.
The bill, which called the ‘Crypto-Currency Act of 2020‘, divides digital assets into three different categories: crypto-currencies, crypto-commodities, and crypto-securities.
Crypto-securities includes all derivative instruments, equity, and blockchain-based debt instruments.
The bill also delineated the duties and responsibilities of Federal regulators regarding cryptocurrencies: CFTC – crypto-commodities; SEC – crypto-securities; FinCEN – crypto-currencies.
All three Federal regulators will publish a detailed list of licensing and certification requirements for U.S. cryptocurrency market participants. The three agencies will also contact each other to provide reliable coverage for cryptocurrency regulations.
Besides, the bill clarifies the concept of Decentralized Oracle, Reserve-Backed Stablecoin, and Synthetic Stablecoin.
A key point in the newly introduced bill is the designation of FinCEN as the core cryptocurrency regulatory tool rather than as a branch of law enforcement. The issue of security classification continues to divide commentators in the US. Some US lawmakers even introduced a bill, which called the “Token Taxonomy Act” to exempt digital tokens from securities regulation.
- Iran will create its own cryptocurrency to challenge U.S. economic dominance
- Germany issues Crypto regulation in 2020 after many objections