US congresspersons have proposed a new cryptocurrency bill to provide more clarity on digital asset regulations by stipulating which government agency is responsible for each asset class.
Labeled the Cryptocurrency Act 2020, the bill will impose regulations on the entire crypto industry if voted into law. It classifies digital assets into three types and determines the government agency responsible for each type, in an effort to provide regulatory clarity to the market.
Introduced by U.S. Representative Paul Gosar, the Cryptocurrency Act 2020 classifies cryptocurrencies into three main groups: cryptocurrencies, crypto-commodities, and crypto-securities.
The first type, cryptocurrencies, include Bitcoin, stablecoins, and any other cryptocurrencies that are not covered by the current securities regulations. The bill says this asset category “includes representations of United States currency or synthetic derivatives resting on a blockchain or decentralized cryptographic ledger.”
The second type is crypto-commodities, which are “economic goods or services that markets treat with no regard for who produced the goods or services.” These assets must reside on a blockchain or decentralized cryptographic ledger.
Crypto-securities is the final type, which includes tokenized debt, equity, and derivative instruments that live on a blockchain or decentralized ledger.
The bill proposes the Commodity Futures Trading Commission (CFTC), the Securities and Exchange Commission (SEC), and the Financial Crimes Enforcement Network (FinCEN) as the regulatory bodies for the three types of digital assets.
If the bill is passed, FinCEN will gain control over cryptocurrencies, responsible for maintaining a public record of all licenses, certifications, and registrations required to create, issue, or trade digital assets.
Crypto-commodities would be regulated by the CFTC, which must lay out the rules for these tokens if the U.S. Congress approves the legislation.
The SEC is set to regulate security tokens. The agency recently published a rulebook for security token trading created by the Boston Security Token Exchange (BSTX).
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