A United States lawmaker is currently working hard to bring clarity and legitimacy to cryptocurrencies and regulatory bodies overseeing the emerging industry.
Congressman Paul Gosar (Republican-Arizona) may be under self-quarantine following a COVID-19 exposure but has recently introduced a bill that seeks to differentiate the various digital assets and to determine which regulator to oversee each of them.
The proposed bill, which was dubbed “Crypto-Currency Act of 2020,” had classified these digital assets into three different sections, namely, crypto-commodity, crypto-currency, and crypto-security.
Crypto-Currency Act of 2020 Overview
Aside from providing classifications, the bill went further to explain what each of the classes of digital assets entails clearly.
It explains that crypto-commodities are “economic goods or services.” Crypto-currencies are “representations of United States currency or synthetic derivatives… such as stablecoins.”
On the other hand, crypto-securities includes “all debt, equity, and derivative instruments that rest on a blockchain or decentralized cryptographic ledger.” However, no mention was made of the category where non-fungible tokens are placed.
These three categories of digital assets were each assigned a regulatory body to oversee them.
Crypto-commodities are to be governed by the Commodity Futures Trading Commission (CFTC), crypto-currencies by the Secretary of the Treasury through the Financial Crimes Enforcement Network (FinCEN), and lastly, the Securities and Exchange Commission (SEC) will oversee crypto-securities.
For several years, various lawmakers and investors in the crypto industry have yearned to get clarity on crypto regulations. Facebook’s Libra project had been facing the full glare of regulators all over the world, and this had prompted the recent adjustments made on the proposed stablecoin.
Earlier this year, US lawmaker, Warren Davidson, reintroduced an updated version of his bill dubbed “Token Taxonomy Act” which seeks to clarify the legal standing of cryptocurrencies in the United States.