Newly Submitted Bill Expected to Provide Simplicity to Crypto Regulation

Paul Gosar, a Republican member of the US House of Representatives, has submitted a bill that will provide regulatory “simplicity” to the cryptocurrency space in the US. The news was announced on the 19th of December by Forbes in a press release. The bill, which is tagged as the Crypto-Currency Act of 2020, will determine what agency gets to governs what crypto assets.

The 3 Classes of Crypto Asset
The bill looks to categorize cryptocurrency assets into 3 distinct categories including crypto-commodities, crypto-currencies, and crypto-securities.

1- Crypto-commodities are described as financial products or services reserved on a blockchain, are fungible, and are treated equally with other commodities regardless of who the producer may be.

2- Crypto-currencies are described as representatives of the USA’s native currency reserved on a blockchain. This comprises of financial tools like fiat-supported Stablecoins, and currencies certified by decentralized smart contract mechanisms.

3- Crypto-securities are described as financial instruments that address every debt, equity and derivative financial tools reserved on a blockchain, except for some conducted and listed as complaint money services enterprises.

Division of Authority
Every class of the listed crypto-asset will fall under the purview of separate regulatory entities. Each of the entities will serve as the “Federal Crypto Regulator” for that crypto class.

As might have been anticipated, the Commodity Futures Trading Commission will be the governing entity to oversee crypto-commodities, the Securities and Exchange Commission will oversee crypto-securities, and the Financial Crimes Enforcement Network will solely oversee crypto-currencies.

Crypto Sector Unanimously Backs Bill
Although the bill is yet to be passed, it has already gained heavy backing from the cryptocurrency sector which has needed such simplicity for a long while now.

Also, the European Union’s Fifth Anti Money Laundering Directive will be held on the 10th of January next year and is expected to provide better simplicity to the European crypto sector.