U.S. Congress To Vote For Federal Crypto Regulations

U.S. lawmakers are making further moves to provide a global crypto regulatory framework, as the new “Cryptocurrency Act of 2020” will be put for voting right after the holiday break.

The past 12 months saw numerous cases of regulatory improvements, both in the United States, as well as in the European Union and Asia. Most of the law updates are associated with Facebook’s Libra project, as well as Telegram’s ICO.

Now, U.S. Congress is considering implementation through a more global approach to digital assets as a whole.

The “Cryptocurrency Act of 2020” aims to clarify which Federal Agencies would deal with digital assets in common, and the core mechanisms about licensing, certification, and registration for companies. Businesses wanting to operate on the U.S. market must comply with the general framework, as well as most of the present crypto rules.

The new Act defines three major agencies, which will oversee the crypto processes - Financial Crimes Enforcement Network (FinCEN), the Securities and Exchange Commission (SEC), and the Commodity Futures Trading Commission (CTFC).

The document also splits the types of digital assets into three distinctive categories: cryptocurrencies, crypto-commodities, and crypto-securities. FinCEN would oversee cryptocurrencies, the SEC would regulate the crypto-securities sector, and the CTFC would take control over the crypto-commodities.

The new framework also gives a short explanation about the differences between the types of digital assets, how these assets would communicate with decentralized oracles, and essential agency coordination.

The “Cryptocurrency Act of 2020” also gives two definitions of stablecoins - Reserve-Backed Stablecoins and Synthetic Stablecoins. The first type of stablecoins is fully collateralized to a fiat currency government-issued digital asset. Synthetic stablecoins, on the other hand, are described as “a digital asset, backed by fiat currencies or other assets that are not issued by governments.

U.S. lawmakers chose the “Big Three” for regulating the crypto market, not by coincidence. In October, FinCEN, CTFC, and the SEC stated that businesses and individuals must comply with the anti-money laundering obligations in the Banks Security Act (BSA). The joint statement made it clear that the “Big Three” is working its way into the crypto sector.