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, Author: Kollen Post, Translator: Xi Yu, published with permission.

Source: Pixabay

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Source: Pixabay

On March 9, Congressman Paul Gosar (R-AZ) introduced the Cryptocurrency Bill 2020, which seeks to orchestrate various digital assets to deal with appropriate regulators.

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Proposed regulatory scheme

As Gosar’s legislative assistant Will Stechschulte explained to Cointelegraph,

“This bill not only provides clarity to cryptoassets in the United States, but legitimacy.”

Gosar's proposal divides digital assets into three categories: crypto-commodities, cryptocurrencies and crypto-securities. These three categories are regulated by the U.S. Commodity Futures Trading Commission (CFTC), the Financial Crimes Enforcement Network (FinCEN) under the U.S. Treasury Department, and the Securities and Exchange Commission (SEC), respectively.

The language behind crypto securities is still familiar:

"All debt, equity and derivatives that rely on a blockchain or distributed encrypted ledger."

As for non-fungible tokens (NFTs), the bill makes no mention of them.

The Act has been updated since December

The bill is an updated version of the bill first leaked last December. The updated bill expands definitions of terms like "decentralized encrypted ledger" and "smart contract," concepts U.S. lawmakers are grappling with.

Perhaps more importantly, the updated Act is more explicit about identifying "primary" rather than "sole" regulatory responsibility. Exactly what that means remains to be seen, but the change could weaken the legal status of cryptocurrency businesses, which they argue the SEC does not have the authority to regulate.

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Industry stakeholders involved in drafting

Gosar introduced the bill alone without a cosponsor, in a violation of traditional congressional practice. Stechschulte told Cointelegraph: “As an introduction, it will be Congressman Gosar. [...] After the introduction, we hope to get some serious support.”

Gosar’s Director of Communications, Ben Goldey, explained the emphasis on industry engagement ahead of legislative approval:

“As this is a niche issue, we worked with stakeholders and external groups/experts to gain a good understanding of the clarity the industry needed. We opted to gain stakeholder support before choosing a co-sponsor. "

In an interview with Cointelegraph, Finman said he initially approached Gosar’s team to work on the bill because “I love how brave they are and how strong they are in everything.”

Regarding the history and development of the bill since its release in December, he said many players weighed in on it:

"That leaked bill, we tried a few things after that, and this is our second draft. We have 32 versions left."

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relevant legislation

Over the past year, a number of new draft bills have emerged, especially in response to Facebook's white paper for Libra. The fear of facing SEC regulation could alter Libra's original vision of managing securities based on a "basket of currencies."