As you probably know if you have been reading our US crypto regulation news earlier this month, the United States Representative Paul Gosar of Arizona introduced a bill named the Cryptocurrency Act of 2020. This bill seeks to introduce a clearer set of regulations on cryptocurrencies, proving the bright future of US regulation. According to the Rep. Gosar, this bill would “make it easier for businesses, institutions, and everyday Americans to participate in the growing industry. No more murkiness, uncertainty, or confusion.” Many vocal analysts in the cryptonews said that this bill presents the future of US crypto regulation through clarifying the specific federal agencies that will participate in the regulation of digital assets. Also, the bill requires agencies to inform the public of its grant of federal licenses, certificates and registrations. The US crypto regulation update also shows that when it comes to actually regulating cryptocurrencies, the bill differentiates them between “crypto-commodity,” “crypto-currency,” and “crypto-security.” These digital assets fall within different regulatory ambits, too. In that manner:
- The crypto commodities will be regulated by the Commodity Futures Trading Commission (CFTC) as the primary regulator.
- The crypto securities and “synthetic” stablecoins as they named them, the main regulator will be the Securities and Exchange Commission (SEC).
- The crypto-currencies will be primarily regulated by the Financial Crimes Enforcement Network (FinCEN) and the Comptroller of the Currency.
The future of US crypto regulation is written in the bill, which sets out rules for cryptocurrencies and mainly allows them to allow FinCEN to trace the crypto transactions (including stablecoins) as well as the individuals involved in them. As we can see from this, the bill effectively places cryptocurrencies at the same regulatory treatment such as traditional financial institutions. FinCEN will also be empowered to conduct audits for each reserve-backed stablecoin as a means to ensure that all of them are fully backed by currencies (issued by the local or foreign governments that they represent). All in all, the future of US crypto regulation under this bill is definitely more transparent, placing CFTC, FinCEN and SEC in charge when it comes to money laundering, terrorism financing and other criminal activities that have been linked to the use of cryptocurrencies.