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US Congress Representative Paul Gosar presented Cryptocurrency Act 2020 for discussion in House of Representatives

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Jayashree Ingle Follow

INDIA

Mar, 13 2020

Mar, 13 2020

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The US Lawmakers seem to be more serious towards regulating the crypto industry. In another consecutive move on March 9, US Congressman, representing the State of Arizona, Paul Gosar presented a new amended draft of the Cryptocurrency Act of 2020 in the House of Representatives for discussion.

Crypto-currency Act of 2020 is to provide clarity on issues such as licensing, registration of the crypto assets and deciding about the authority of regulatory bodies for specific crypto assets.  

Paul Gosar said, “By providing much-needed regulatory clarity about cryptocurrency, we will make it easier for businesses, institutions and everyday Americans to participate in this growing industry. No more murkiness, uncertainty or confusion.”

After the presentation of the Bill on the floor, Communication Director of Congressmen Gosar, Ben Goldey said that the Bill will now be sent to the committee for revival. He informed that usually within the first week, it gets assigned but there is a possibility that the Financial Services Committee will take it up for review.

The details of the Draft 

The bill is said to be to clarify the Crypto assets classification as well as regulatory bodies of the Crypto assets in the United States. The bill is the amended version of the previous December 2019 and includes the new expanded definition of the decentralized cryptographic ledger and smart contract.

Gosars’s Crypto bill proposal divides cryptocurrencies into 3 categories - Crypto commodity, Crypto -security, and Cryptocurrency.

All three categories would be governed by different regulatory bodies. As per the recommendations, the Financial Crimes Enforcement Network (FinCEN) will look after cryptocurrencies, Crypto commodities would be under the authority of Commodity Future Trading Commission (CFTC), and Crypto securities would fall under the authority of Securities and Exchange Commission (SEC).

Communication Director of Congressmen Gosar, Ben Goldey said," Since this is such a niche issue, we worked with stakeholders outside groups and experts to get a good sense of the kind of clarity that the industry needed. We chose to gather stakeholders’ support before working towards co-sponsors."

Among the persons who contributed to drafting the Bill is Marshal Hayner of Metal Pay and Bitcoin investor and supporter Eric Finmen. While elaborating about the previously leaked copy of the Bill in December 2019, he said, that they were experimenting with a couple of things that were included in the second draft. And now they are 32 versions away from that.

As per the draft Bill: 

The definition of the Cryptocurrencies is – the representation of the US currency or a synthetic derivative based on a blockchain or a decentralized cryptographic ledger. Specifically, these include Stable coins - 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 are classified as economic goods or services. Securities have been classified as all coins that fall under debt, derivative or equity instruments based on blockchain.

Experts Opinion on the Draft 

Overall there a negative and ambiguous sentiment was observed in the industry about the bill.

While reviewing the latest version of the bill, Kristin Smith of the blockchain Association quoted that its dead on arrival. Partner at Zuber Lawler Josh Lawler said, while most of the statutory schemed don’t work, some might be better than others but it’s not easy to get a comprehensive plan.


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Jayashree Ingle

CBW - External Analyst

INDIA

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