Around the world, regulators are trying to tackle the $ 1 trillion elephant in the room: the digital asset market. Because cryptography is a nascent industry that currently exists largely outside the legal framework, it is still in turbid waters, and those in and out of the industry seem to want clear guidelines and clarity to move forward.
A crypto bill, sponsored by U.S. Sen. Cynthia Lummis, a Wyoming Republican, and New York Democrat Kirsten Gillibrand, aims to install guides around the space for digital assets. The 69-page bipartisan bill is comprehensive and covers many corners of the crypto markets.
Some of the highlights of the proposal include:
“This bill is trying to do everything, which may be its biggest impediment.” Christopher LaVigne, co-chair of cryptographic practice, Withers
- Make $ 200 or less tax-free cryptocurrency transactions.
- Define guidelines for differentiating cryptocurrencies as commodities or securities (most would fall into the category of commodities, according to the bill).
- Support stable currencies with a 1: 1 currency, moving towards “100% reserve, asset rate and detailed disclosure requirements for all stable payment issuers”.
- Grant to the U.S. Commodity Futures Trading Commission the exclusive jurisdiction of the spot market over cryptocurrencies defined as commodities.
- Marking the U.S. Stock Exchange and Securities Commission and the CFTC as the leading watchdogs in the digital asset industry.
“The bill is important because it is a step in the right direction for legislation and the definition of‘ cryptography ’, what a‘ cryptographic asset ’is and what regulation will be like,” said Nick Donarski, founder and CTO of ORE System, at TechCrunch. .
“But at the same time, the bill, like other cryptography-related bills, would be more likely to split to get enough support to pass it.”
Empower the CFTC
“There’s a lot of color here and it’s pretty exciting,” Ken Goodwin, Blockchain Intelligence Group’s director of regulatory and institutional affairs, told TechCrunch. By giving the CFTC oversight of most digital assets, it is setting a precedent and giving more validation to the agency, he said.
Goodwin worked on Wall Street for over 20 years and has spent the last eight years in the blockchain space. Even with his background in both traditional and crypto finance, he said he is surprised by the CFTC’s position on the bill.
“It simply came to our notice then [CFTC] to be really at the forefront of that; I thought the SEC would be the regulator of that, “Goodwin said.” Even if this bill is not passed, people will look to the CFTC for guidance. “