In a clear indication that US lawmakers are getting serious about regulating the crypto space, a US Congressman representing the state of Arizona, Paul Gosar, has introduced a new draft discussion bill in the House of Representatives.
The stated purpose of the ‘Crypto-Currency Act of 2020’ is to provide clarity on issues like licensing, registration, and which regulatory bodies are responsible for regulating different kinds of digital assets.
The bill has divided cryptocurrencies into three major branches – crypto-securities, cryptocurrencies, and crypto-commodities. It proposes a federal crypto regulator for each of the three categories to notify the public of any licenses and registrations required.
Per the draft bill, cryptocurrencies have been defined as the representation of a US currency or a synthetic derivative based on a blockchain or a decentralized cryptographic ledger. These include, in particular, stablecoins (reserve-backed digital assets that are fully collateralized in a correspondent banking account) and synthetic derivatives that are secured by other cryptocurrencies or crypto-securities.
Crypto-commodities have been classified as economic goods or services that have full or substantial fungibility, are treated by markets without any regard for who produced the goods or services, and rests on a blockchain or decentralized cryptographic ledger. On the other hand, securities have been classified as all coins that are debt, equity or derivative instruments based on a blockchain.
Each of the three digital assets would be regulated by different regulatory agencies. While cryptocurrencies are proposed to be regulated by the Financial Crimes Enforcement Network (FinCEN), crypto-commodities would be subject to regulation by the Commodity Futures Trading Commission (CFTC). Likewise, crypto-securities would fall under the purview of the Securities and Exchange Commission (SEC).