US Congressman Introduces 2020 Cryptocurrency Act

One US congressman is in the news today for being the latest person working to clarify and determine which US regulator is responsible for which digital assets. On March 9, the Representative Paul Gosar (R-AZ) introduced the “Cryptocurrency Act of 2020” in a bill that looks to choreograph a wide range of cryptocurrencies to the appropriate regulator.

As the regulation crypto news today show, Gosar’s legislative assistant explained that “the bill looks to provide not only clarity, but legitimacy to crypto assets in the United States” when talking to the media.

In that manner, the US Congressman introduces a new proposal which divides digital assets in three main categories: crypto-commodity, crypto-currency and crypto-security. All of the three categories would be governed by the Commodity Futures Trading Commission (CFTC), the Secretary of the Treasury via the Financial Crimes Enforcement Network (FinCEN) as well as the Securities and Exchange Commission (SEC).

What is very interesting is the language of the bill, which would seem to cement the status of digital assets such as Bitcoin as crypto commodities rather than crypto-currencies as noted in the bill. The classification of “crypto-currency” reads “representations of United States currency or synthetic derivatives” which is more reminiscent of stablecoins such as Tether (USDT).

The language behind crypto-securities, as the US Congressman introduced it, remains familiar: “all debt, equity, and derivative instruments that rest on a blockchain or decentralized cryptographic ledger.”

The bill is actually an updated version of the one that first leaked in December 2019, which expanded definitions for terms such as “Decentralized cryptographic ledger” and “smart contract” – both of which are concepts that US legislators are struggling to cope with.

More significantly, the updated bill is more explicit about determining “primary” rather than “sole” regulatory responsibility. The exact implications remain to be seen, but the change could weaken the legal standing of crypto businesses arguing that the SEC has no right to regulate them.
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The past year has seen a number of new draft bills. The US Congressman introduced this “Crypto-Currency Act of 2020,” something that came right after the Libra news featuring the official white paper that Facebook prepared for their upcoming Libra stablecoin.