USA’s redesigned “Crypto-Currency Act 2020” is for regulating cryptocurrency
The Monday, 9th March 2020, the US regulatory body is working on revising the cryptocurrency bill. Crypto-Currency Act 2020 will redefine the digital currencies and sectioned them in three different part. The governing bodies will be regulating the entire system. The bill stated that the power of controlling cryptocurrencies will be included in this bill.
This bill has become the non-acceptable draft as the crypto community started rejecting it. Chief Strategy Officer at Human Rights Foundation, Alex Gladstein, who himself a bitcoin lover raised the concern about the cryptocurrency bill 2020 as it could snatch the basic human privacy. Paul Gosar, a representative from Arizona, came up with the new regulatory framework in the cryptocurrency ecosystem where he subdivided cryptocurrency into three categories. According to the bill, these three subsections of cryptocurrency will be regulated via three sole government department. These departments are as follows:
· Commodity Futures Trading Commission (CFTC)
· Financial Crimes Enforcement Network (FinCEN)
· Securities and Exchange Commission (SEC).
According to a report derived from the Bloomberg, CFTC and FinCEN are not related to currency or asset regulation. The draft bill designed to focus on the currency but here providing the power to the institutions which are not even associated with the currency or asset is a surprising move. The institution CFTC is conducting the regulation of derivatives trading and FinCEN authorised to serve for institutions. These two government bodies have nothing to deal with currencies or asset still they will play a major role in controlling cryptocurrency according to the draft bill.
According to cryptocurrencies true definition, this technology does not belong to government bodies. This is a decentralized system where the government have to respect the privacy of the people. Removing the middle man is the main motto of building cryptocurrency. Now with a reformed draft bill government is asking for giving up the information and again trap under the centralized platform. He asked people,“If you buy any cryptocurrency at a regulated exchange, do you want that company to be giving up your information (NAME bought X amount of Y on withdrew on Z day) to the government without a warrant? Without any probable cause?”
Along with Goldstein, many crypto lovers are against the draft bill. The section of the cryptocurrencies is categorised as crypto-commodity, crypto-currency and crypto-security. According to the source the bitcoin and along with other similar tokens are considered to be in the crypto-commodity structure but on the other hand, crypto-currencies will be all stable coins. But crypto-security will come under this definition, “all debt, equity, and derivative instruments that rest on a blockchain or decentralized cryptographic ledger.”
According to the bill, crypto-commodity will be categorised following the reconstructed definition of US government and crypto-currency as well. Crypto-commodity got the new definition from the government of the USA. The definition stated,“economic good or service, including derivatives that have full or substantial fungibility; the markets treat with no regard as to who produced [them;] and rest on a blockchain or decentralized cryptographical ledger.”
In this way, three government sector like FinCEN, CFTC, And SEC will take care of the section of stablecoin, virtual currencies and crypto-securities respectively. Following this note cryptocurrencies will be regulated via FinCEN and Crypto-commodity will act under commodity exchange act via CFTC and the rest of it will be regulated through SEC.
If the token functions according to the check of Howey, it is, therefore, a safe. The new act includes basically fungible tokens. However, non-fungible tokens are exempt. This speculates on how to manage the non-fungible tokens.
The major part of the bill is that the “key” control designation is clear. This plays a better role than the already operating utterly. This affects cryptographic space. There will be many improvements on an administrative basis. Many entities are also required to conduct their statutory duties lawfully.
The Communications Director for Congressman Ben Goldey said,
“Since this is such a niche issue, we worked with stakeholders and outside groups/experts to get a good sense of the kind of clarity that the industry needed. We chose to gather stakeholder support before working toward cosponsors.”
Here comes the need for revision of the regulatory framework. It is well aware that blockchain technology is a growing platform and cryptocurrencies along with it. As the cryptocurrencies are evolving frequently the need for modification of the law required. And we are all mindful that there are no clear guidelines or a designated authority to track cryptocurrencies closely. There is no clear definition of the forms, applications and business implications of cryptocurrencies. The lack of support for businesses, founders and businessmen have led to widespread uncertainty. The new draft legislation would eliminate these confusions, which would make it possible for an organization to improve the crypto market.
Therefore, this new regulation bill will either eliminate all regulatory uncertainty from the cryptocurrency world, or it will again act as a centralized formant. Well, crypto enthusiasts are not looking to give the regulator the power to control cryptocurrencies. As a result, the proposal is still under revision and soon new facts will be disclosed which may draw the attention of the crypto market to it. Yet the first round of the bill is not suitable in the crypto environment, as it excludes the true decentralized structure of the system.
https://www.coinbreze.com/
Telegram: https://t.me/coinbreze
Twitter: https://twitter.com/coinbreze
Facebook: https://www.facebook.com/Coinbreze