US Congress to Consider Cryptocurrency Act in 2020

Bitcoinist December 21, 2019
Updated 2019/12/21 at 2:56 AM
4 Min Read

The U.S. cryptocurrency scene might be on the way to seeing clear cut crypto regulations as Congress prepares to consider a new bill detailing modalities for digital asset oversight.

Clear Definition for Digital Assets

According to Forbes, the proposed bill titled ‘Cryptocurrency Act of 2020’ seeks to provide a clear framework for crypto regulations in the U.S. beginning with establishing protocols for defining digital assets.

The bill recognizes three distinct types of digital tokens — crypto-commodities, crypto-securities, and cryptocurrencies. According to the bill, crypto-securities cover all blockchain-based derivatives, equity, and debt instruments.

Secondly, the bill delineates the duties and responsibilities of Federal regulators regarding cryptocurrency. As part of the proposed bill, three U.S. regulatory agencies — Securities and Exchange Commission (SEC), Financial Crimes Enforcement Network (FinCEN), and the Commodity Futures Trading Commission (CFTC), will oversee crypto regulations in the country.

Details in the proposed bill show the SEC tasked with crypto-securities oversight. The CFTC will oversee crypto-commodities while FinCEN will create a framework for tracing cryptocurrency transactions. As per the bill, all three will function under the aegis of ‘Federal Crypto Regulator’ or ‘Federal Digital Asset Regulator.’

According to the bill, all three Federal regulators will publicly publish detailed lists of licensing and certification requirements for participants in the U.S. crypto market. The three agencies will also liaise among themselves to provide robust coverage for cryptocurrency regulations.

This particular stipulation is akin to the way the Office of the Comptroller of the Currency (OCC), the Federal Reserve, and the Federal Deposit Insurance Corporation (FDIC) work together to govern the mainstream financial market.

Clear Cut Cryptocurrency Regulations for US Market

Cryptocurrency stakeholders in the U.S. will be hoping that the proposed bill brings some level clarity to the state of crypto regulations in the country. As previously reported by Bitcoinist, several market participants have bemoaned the patchwork nature of State and Federal cryptocurrency regulations.

One key takeaway from the newly introduced bill is the designation of FinCEN as a core crypto regulator rather than its role in mainstream finance as a law enforcement arm. The bill might also help to clarify what constitutes a security as far as digital tokens are concerned.

The issue of what should be deemed a security continues to divide commentators in the U.S. Some U.S. lawmakers even introduced a bill —the ‘Token Taxonomy Act,’ seeking to exempt digital tokens from securities regulation.

2019 has seen crypto-related matters becoming a fixture in U.S. legislative activities. Many cryptocurrency stakeholders have appeared before Congress especially after the Libra announcement.

With talk of 2020 being the year when governments will move forward with sovereign digital currencies, next year might see even more crypto-related deliberations in Washington.

Do you think the proposed bill can bring clarity to the U.S. crypto space? Let us know in the comments below.

Images via Shutterstock

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