A U.S. Congressman (Paul Gosar: Republican-Arizona) has reportedly introduced a draft bill to bring regulatory clarity in the cryptocurrency space, dividing cryptocurrencies into three parts: crypto-commodities, crypto-currencies, and crypto-securities.
The bill, dubbed “Crypto-Currency Act of 2020,” was introduced in the House of Representatives, according to a copy obtained by Forbes. The bill seeks to clarify which federal agencies should regulate cryptocurrencies.
The bill has divided cryptocurrencies into three parts – “crypto-commodities,” “crypto-currencies” and “crypto-securities.” Accordingly, it has proposed a “federal crypto regulator’’ for each of the categories to notify the public of any licenses and registrations required.
The Commodity Futures Trading Commission (CTFC) has been proposed to regulate crypto-commodities; the Securities and Exchange Commission (SEC) for crypto-securities; and the Financial Crimes Enforcement Network (FinCEN) for crypto-currencies.
The bill has also provided definitions for the three types of cryptocurrencies. Crypto commodity means “economic goods or services;” Crypto-currency is defined as representations of US currency or “synthetic derivatives resting on a blockchain;” and Crypto-security, on the other hand, means “all debt, equity, and derivative instruments that rest on a blockchain.”
“The Secretary of the Treasury, acting through the Financial Crimes Enforcement Network, shall issue rules to require each crypto-currency (including synthetic stablecoins) to allow for the tracing of transactions in the crypto-currency and persons engaging in such transactions in a manner similar to that required of financial institutions with respect to currency transactions,” according to the bill.
Regulatory clarity has since long been sought by market participants and lawmakers. 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.
It remains to be seen whether Davidson’s and Gosar’s bills move ahead in the new year to provide much-awaited regulatory clarity.