A congressman from the United States is the latest piece of work to clarify which US regulator is responsible for which digital assets.
Representative Paul Gosar (R-AZ) introduced the “2020 Crypto-Currency Act,” a bill that seeks to choreograph a wide range of digital assets to respond to the regulator in question.
As Will Stechschulte, Gosar’s legislative assistant explained, “the bill looks to provide not only clarity, but legitimacy to crypto assets in the United States.”
The proposal by Gosar splits digital assets into three categories: crypto-commodity, crypto-currency, and crypto-security. The Commodity Futures Trading Commission (CFTC), the Treasury Secretary via the Financial Crimes Enforcement Network (FinCEN), and the Securities and Exchange Commission (SEC) would regulate the three categories, respectively.
Interestingly, the bill’s language appears to cement the status of digital assets such as Bitcoin as crypto commodities rather than crypto-currencies. The “crypto-currency” classification reads “representations of United States currency or synthetic derivatives”— more reminiscent of stablecoins such as Tether (USDT).
The language behind crypto-securities, remains familiar: “all debt, equity, and derivative instruments that rest on a blockchain or decentralized cryptographic ledger.”
Updates to the Bill Since Last Year
The bill is an updated version of one that leaked for the first time in December. The updated bill features expanded definitions for terms such as “Decentralized cryptographic ledger” and “Smart Contract” — concepts that U.S. lawmakers struggle to cope with.
Perhaps more significantly, the updated bill is more explicit in determining “primary” rather than “sole” responsibility for regulating. It remains to be seen the exact implications, but the change could weaken the legal status of crypto businesses arguing that, say, the SEC has no right to regulate them.
Breaking with typical congressional practice, Gosar is presenting the bill solo, without a co-sponsor. Stechschulte said that “For introduction, it’s just going to be Congressman Gosar. […] After introduction, we’re hoping to garner some serious support.”
“Since this is such a niche issue, we worked with stakeholders and outside groups/experts to get a good sense of the kind of clarity that the industry needed. We chose to gather stakeholder support before working toward cosponsors.”