Understanding the Crypto-Currency Act of 2020

The latest buzz in the world of digital assets comes courtesy of U.S. Representative Paul Gosar (R-AZ) with his newly proposed division of digital assets under the Crypto-Currency Act of 2020. The aim? To establish clear guidelines regarding which regulatory body oversees different types of digital currencies.

Decoding the Categories

The proposed bill categorizes digital assets into three neat boxes. Think of it as a digital asset Hall of Fame, if you will:

• Crypto-Commodity: Governed by the Commodity Futures Trading Commission (CFTC). Imagine assets like Bitcoin lounging here, finally labeled appropriately.
• Crypto-Currency: Overseen by the Secretary of the Treasury and FinCEN, this category is for assets that act like cash—though it’s starting to sound more like stablecoins than your run-of-the-mill Bitcoin.
• Crypto-Security: The SEC gets the reins on this category, which includes all sorts of debt and equity instruments hovering in the blockchain realm.

Digital Assets: Commodities or Currencies?

Curiously, Gosar’s proposal leans toward classifying many assets traditionally seen as cryptocurrencies as commodities. Take Bitcoin, for instance; it’s now wearing a new hat as a crypto-commodity rather than a crypto-currency. It gives a whole new meaning to the phrase ‘not your dad’s currency.’

What’s New and What’s Improved?

The updated version of the bill features definitions that may seem like they were pulled straight from a tech-savvy glossary—“Decentralized cryptographic ledger” and “Smart contract” now come with the legalese stamp of approval. Plus, the wording of “primary” regulatory responsibility is a twist that could leave crypto businesses wondering if they’re suddenly on a regulatory merry-go-round.

Stakeholder Engagement and Industry Voice

In a somewhat surprising move, Gosar marches solo with this bill without co-sponsors, at least initially. Industry stakeholders, including the infamous Bitcoin investor Erik Finman, have had a hand in shaping this legislative journey. Finman, who described Gosar and his team as “brave,” highlighted that this isn’t just legislation—it’s a collaborative effort to ensure a clear direction in the crypto landscape.

The Legislative Landscape: A Growing Focus

2020 has seen multiple legislative attempts to clarify cryptocurrency regulations. While the Crypto-Currency Act aims to bring clarity, it’s hard not to notice the shadows of prior proposals such as the Token Taxonomy Act hanging around. According to Finman, the new act is not only ambitious but might just take the lead in the race for legislation clarity.