Cryptocurrency is one of the most important assets in today's economy because of many reasons. It may be its high rates of return or just a trend if one may put it that way.
Originally triggered by 'Libra' a project by Facebook, the act will provide a confined guideline and framework for working and handling digital assets, specifying the federal agencies in America liable to deal with the regulation of digital assets. Also notifying the agencies to notice their public with any form of Federal licenses, registrations or formal licenses that need to be made, in case of one wanting to make transactions and trade in the form of such assets. The bill not only focuses on the transaction with such assets but also transfers, handling over and many other purposes revolving around the usage of such crypto-currencies.
What does the bill say?
Drafted by Paul Gosar, an Arizonian Republican, to bring regulation and clarity with the processes revolving around this form of currency and in the entire cryptocurrency sector.
Going to be introduced in the House of Representatives, the 'Crypto-Currency Act of 2020' will state the steps and regulations to be maintained by agencies to deal in and regulate such crypto-currencies.
Summary of the points drafted in the bill
The bill gives the duty of 'Federal Digital Asset Regulator' or 'Federal Crypto Regulator' to mainly three agencies namely the Commodity Futures Trading Commission in America (CFTC), the Security and Exchange Commission (SEC), and the National Financial Crimes Enforcement Network (FinCEN).
ESTABLISHING AREAS OF REGULATORY OVER-SIGHT FOR DIGITAL ASSETS: The Federal Crypto Regulators are handed over responsibilities and is declared to be the only government-operated agency with the authority to regulate and give instructions to
(a) CRYPTO-COMMODITIES — The Commodity Futures Trading Commission (CFTC) shall be the sole Government agency with the authority to regulate crypto-commodities.
(b) CRYPTO-CURRENCIES —The Secretary of the Treasury, acting through the Financial Crimes Enforcement Network (FinCEN), shall be the sole Government agency with the authority to regulate cryptocurrencies (other than synthetic stablecoins).
(c) CRYPTO-SECURITIES.—The Securities and Exchange Commission (SEC) shall be the sole Government agency with the authority to regulate crypto-securities and synthetic stablecoins.
AVAILABILITY OF INFORMATION TO THE PUBLIC ON REQUIREMENTS TO CREATE OR TRADE IN DIGITAL ASSETS
The Federal Crypto Regulators even though being a government-operated organization is to be made accessible to the common public at all times. Also keeping a total track and record of all the Federal Licenses, certifications or files of registrations to be maintained to go ahead and trade in such digital assets.
FINCEN RULES FOR CRYPTO-CURRENCIES
The bill also asks for the Secretary of the National treasury to operate via FinCEN to establish regulatory rules similar to the financial institutions to enable the tracing of such crypto-currency transactions in case of a fraudulent undertaking.
When will this bill come into action?
Drafted by the end of 2019 as the Congress wraps up for the holiday recess, the bill is said to be presented in the House of Representatives in 2020.
In a wide array of bills referring to the use of cryptocurrencies and blockchain policies, this bill is said to be considered in the session of the 116th congress session. This information is based on the discussion draft of the Act shared by Forbes. Changes in the bill may be expected based on the suggestions provided by the corporates and government officials during the course of the discussion.
Why bring this bill?
The Crypto-currency regulating act will be acting as a set of rules and regulations to match the cryptographic currencies in the same level of transactional importance as the US dollar bills. The inclusion is in the form of the current regulatory guidelines, taking into consideration both the federal and state-level business transactions as well as transactions in the private sector innovation companies. It may help in making a safer and more reliable way of transaction for worldly firms making huge transfers.
Regulations and clarifications for Crypto-currency and Blockchain research companies
The processes and the technology of crypto-currency in the trade sector have still been a background talk when it comes to economically leading entities in the world, not being able to match up with the current guidelines of the trading environment. The bill is addressed to provide clarity across on a federal level, all starting with the US treasury giving regulations to pay the taxes in the form of crypto-currencies.
Use of Blockchain technologies in the government
Made to facilitate the technological advancements in the field of usage of crypto-currencies in the transactions made in the government, also taking the advancements of Blockchain technology, as a continuation of the Blockchain Promotion act of 2019 making the use of blockchain feasible for government agencies.
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