P Xenos and M Bacina
US Congressman canvasses Crypto Currency Act of 2020
A United States congressman, Representative Paul Gosar (R-AZ), has introduced to US Congress the “Crypto-Currency Act of 2020.”
This Bill is intended to clarify and determine which U.S. regulator is responsible for different digital assets.
Will Stechschulte, Gosar’s legislative assistant, said:
The bill looks to provide not only clarity, but legitimacy to crypto assets in the United States.
Gosar’s proposal divides digital assets into three categories::
crypto-commodites, to be regulated by the Commodity Futures Trading Commission (CFTC);
crypto-currencies, to be regulated by the Secretary of the Treasury via the Financial Crimes Enforcement Network (FinCEN);
crypto-securities, to be governed by the Securities and Exchange Commission (SEC).
The Bill is intended to solidify the status of digital assets as crypto-commodities rather than crypto-currencies, as the classification of “crypto-currency” reads in the Bill as:
representations of United States currency or synthetic derivatives.
This accurately reflects the classification of stablecoins such as Tether (USDT).
The Bill familiarly defines crypto-securities as:
All debt, equity, and derivative instruments that rest on a blockchain or decentralized cryptographic ledger.
The bill is an updated version of the version first leaked in December, and expands on definitions for terms such as "decentralized cryptographic ledger” and “smart contract."
The updated bill is also more explicit in determining the “primary” rather than “sole” regulatory responsibility, which could weaken the legal standing of crypto businesses arguing that the SEC does not have a right to regulate them.
Gosar is presenting the bill without a co-sponsor, as Stechschulte states:-
For introduction, it’s just going to be Congressman Gosar. After introduction, we’re hoping to garner some serious support.
Communications Director for Gosar, Ben Goldey explained the emphasis on industry engagement before legislative approval, saying:
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.
We are only 3 months into 2020, but we have already seen numerous new draft bills, including Warren Davidson’s (R-OH) Token Taxonomy Act, initially introduced in 2018 and later updated and re-introduced in April 2019 but which has languished. It is increasingly likely that the US Congress will be legislating digital assets this year and it will be interesting to see the final form that legislation takes.