A new omnibus bill introduced by Arizona Representative Paul Gosar on Monday has little chance of passing. However, the cryptocurrency bill could give the lawmakers a chance to look at the crypto industry in a new light.
What does the act include?
The Cryptocurrency Act of 2020, presented on March 9, created different categories of digital coins and defines which federal agencies get to monitor them. Gosar’s legislative assistant Will Stechschulte commented that the bill will provide legitimacy to the crypto industry and add clarity to it as well.
The crypto industry is experiencing a lack of widespread adoption due to the lack of regulatory uncertainty. According to former eToro analyst and Quantum Economics founder Mati Greenspan, uncertainty over the government’s regulatory oversight on cryptocurrencies has kept US investors away from the crypto sector. Some projects have decided to move to other locations. A recent study by Bitwise suggests that 56% of financial advisers consider “regulatory concerns” as the top reason for not investing in digital currencies.
Different proposals to make sense of the crypto
Gosar’s bill is not the only proposal in line to get lawmakers’ attention towards the crypto sector. We already have the Safe Harbor proposal from the Securities and Exchange Commission’s Hester Peirce as well as the Token Taxonomy Act. However, Gosar’s bill is focused extensively on the categorization of cryptocurrencies.
He suggests the Commodity Futures Trading Commission manages one category of digital assets- “crypto commodity.” The second category “cryptocurrency” will be managed by the Secretary of Treasury via the Financial Crimes Enforcement Network (FinCEN). The third category- “crypto security” will be monitored by the Securities and Exchange Commission (SEC).
TokenSoft’s Lawson Baker believes that this categorization could be a “fatal flaw” for the bill. A Bloomberg analyst further commented that the early draft of the bill doesn’t highlight an understanding of the role of federal agencies and laws. A draft version of the bill was leaked in December last year. Coin Center chief executive Jerry Brito criticized Gosar for presenting the flawed bill and pointed out that he is not a member of any of the committees that may discuss the bill. He even said that if the bill receives any support from the lawmakers, he will oppose it on principle.
Blockchain Association’s Kristin Smith doesn’t have high hopes for the bill and commented that it will be “dead on arrival.”