Clear Skies Ahead: Paul Gosar’s Draft Bill Aims for Cryptocurrency Regulation Clarity

Understanding the Crypto-Currency Act of 2020

Arizona Congressman Paul Gosar has stepped into the regulatory ring with his proposed legislation, the Crypto-Currency Act of 2020. This bill seeks to untangle the current whirlwind of regulations and bring much-needed clarity to the cryptocurrency landscape in the United States. It sets the stage to define which federal agencies will oversee various types of crypto assets, paving the way for a clearer regulatory framework.

The Three Flavors of Crypto Assets

One of the bill’s most interesting components is its classification of crypto assets into three distinct categories. Let’s break it down:

• Crypto-Commodities: These are goods or services stored on a blockchain that the market treats as interchangeable, regardless of who produced them. Think of them as the apples of the crypto world—no one cares who grew them!
• Crypto-Currencies: This category encompasses representations of U.S. currency or synthetic derivatives that operate on a blockchain. In other words, these include stablecoins backed by reserves, as well as figures generated from decentralized oracles.
• Crypto-Securities: Covering all sorts of debt, equity, and derivative instruments on the blockchain, this category excludes those recognized as compliant money services businesses.

Who’s Regulating What?

Now, before you think this is all just a game of ‘hot potato’ with regulatory oversight, listen closely. Each type of crypto asset will be governed by a different regulatory body:

• The Commodity Futures Trading Commission (CFTC) will handle crypto-commodities.
• The Securities and Exchange Commission (SEC) is designated for crypto-securities.
• The Financial Crimes Enforcement Network (FinCEN) will take on the responsibility for crypto-currencies.

Stifling Innovation: The Current Scenario

Right now, many in the cryptocurrency industry are feeling the pressure of regulatory uncertainty—like trying to do yoga during an earthquake. This uncertainty has stifled innovation and growth in what is arguably one of the most promising sectors on the planet. The hope is that Gosar’s draft bill garners enough support to provide the clarity needed to jumpstart the industry.

A Global Perspective

Interestingly enough, Gosar’s timing might be keenly aligned with regulatory developments happening across the pond. The EU’s Fifth Anti Money Laundering Directive (5AMLD) is set to take effect just shortly after this bill, potentially making the U.S. look like it’s lagging behind when it comes to crypto regulations.

In conclusion, while the future of the Crypto-Currency Act of 2020 remains uncertain, the clarity it aims to bring is a welcome step for the cryptocurrency community. Let’s keep our fingers crossed and our wallets secure!