At the end of 2019, a U.S. lawmaker has decided to introduce a draft bill that would provide a regulatory framework for digital assets including cryptocurrencies.
U.S. Republican Congressman Paul Gosar has submitted a draft bill to the Houses of Representatives – called the ‘Crypto-Currency Act of 2020’ – intended to clarify which federal agencies should regulate digital assets. In addition to that, the draft bill seeks to request those agencies to inform the public of any federal licenses, certifications, or registrations required to create or trade in such assets, and for other purposes.
A review of the draft bill breaks it down into several parts. Firstly, the bill assigns a definition of ‘Federal Digital Asset Regulator’ or ‘Federal Crypto Regulator’ to three agencies, which are the Commodity Futures Trading Commission (CTFC), the Securities and Exchange Commission (SEC), and the Financial Crimes Enforcement Network (FinCEN).
Secondly, it divides digital assets into three categories, which are as following: crypto-commodities, crypto-currencies and crypto-securities. According to the bill, crypto-commodities are defined as economic goods or services that are fungible and accessible, and rest on a decentralized cryptographic ledger.
Crypto-currencies are defined as representations of United States currency or synthetic derivatives resting on a blockchain or decentralized cryptographic ledger, whilst crypto securities mean all debt, equity, and derivative instruments that rest on a blockchain or decentralized cryptographic ledger.
Furthermore, the federal crypto regulator is assigned one of the categories and serves as the sole Government agency with the authority to regulate. Respectively, the CTFC will be in charge of crypto-commodities, the SEC will regulate crypto-securities and, last but not least, the FinCEN will regulate cryptocurrencies.
In addition to that, each of the federal crypto regulator is required to notify the public of any current federal licenses, certifications, or registrations required to create or trade in digital assets.
The bill also requires the Secretary of the Treasury, through FinCEN, to issue rules similar to financial institutions on the ability to trace cryptocurrency transactions.
Certainly, it is not the first time for lawmakers and market participants to seek regulatory clarity in regards to the digital assets sector. Earlier this year, U.S. lawmaker Warren Davidson reintroduced the Token Taxonomy Act, seeking to give cryptocurrencies a clearer legal standing in the U.S.
In October, the CFTC, FinCEN, and SEC worked together to issue a joint statement on activities involving digital assets, stating that the crypto industry must comply with various banking and financial services laws in the U.S.
In the meantime, if this bill were to be pass, it would further reinforce the way these agencies would co-exist as the three ‘Federal Crypto Regulators’ responsible for regulating digital assets.