For a while now, U.S. legislators and regulatory agencies have been scratching their heads about how to regulate Bitcoin and every other cryptocurrency coming down the pike.
At times it seemed like an insurmountable challenge, partly because there are so many different digital assets to contend with, and each one has its own (block)chain of consideration.
Now, however, U.S. representative Paul Gosar (R-AZ) reportedly has a new suggestion that may help by separating different coins into three different categories that would be regulated differently.
The “Cryptocurrency Act of 2020” would do several important things, first, establishing three categories – crypto-commodities, crypto-currencies and crypto-securities.
Bitcoin, the perennial household name cryptocurrency, would be regulated as a crypto-commodity.
Crypto-currencies would be described as assets based on the U.S. dollar, much like many stablecoins in existence now, such as Tether.
Each of the three categories would be regulated by different corresponding agency – the Commodity Futures Trading Commission (CFTC) would handle crypto-commodities, the Secretary of the Treasury would regulate crypto-currencies via the Financial Crimes Enforcement Network (FinCEN), and the Securities and Exchange Commission (SEC) would tackle crypto-securities.
Late last year, Yogita Khatri at The Block gave us a bit of history of similar efforts.
“Regulatory clarity has since long been sought by market participants and lawmakers,” Khatri wrote. “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. Most recently, CFTC, FinCEN and SEC, all issued a joint statement, saying that the crypto industry must comply with various banking and financial services laws in the U.S.”
This new proposal from Gosar would go a long way toward untangling the various questions about how to regulate each coin, and whether it’s an asset, a security, or something else.
All of this is happening at the same time that cryptocurrency infrastructure is being deployed on the street in the form of Bitcoin ATMs another practical machines.
If Gosar’s proposal takes hold in any form, it could help the SEC streamline initiatives and generally bring crypto currency into our lives in new ways – keep an eye out.