Bitcoin, cryptocurrencies, and digital assets regulations are becoming a relevant topic in the United States. While the U.S. National Congress is still stuck in the debate of whether this asset class enables criminal activities or money laundering, legislation on a state level is moving forward to reduce ambiguities and clarify important points that have long remain in the dark.
According to a press release shared with Bitcoinist, Representative Don Beyer (D) from the Virginia 8th district and Chairman of the Joint Economic Committee has presented new legislation to “protect” consumers and promote crypto innovation.
The Digital Asset Market Structure and Investor Protection Act would integrate Bitcoin and other digital assets into the state’s financial regulatory structures.
Representative Beyer acknowledged that the crypto industry has brought benefits to the U.S. Thus, he believes the country should create a legal and regulatory environment for the sector to grow. Beyer added:
Digital assets and blockchain technology hold great promise, and it is clear that assets like Bitcoin and Ether are here to stay (…).
Around 20 to 46 million people in the U.S. hold Bitcoin and other cryptocurrencies with a projection to growth in the coming years. The Act would seek to “protect” them from market manipulation, scams, and give the first steps to create a legal framework to minimize the risks of investing in this asset class. Representative Beyer added:
Digital asset holders have been subjected to rampant fraud, theft, and market manipulation for years, yet Congress has hitherto ignored the entreaties of industry experts and federal regulators to create a comprehensive legal framework. Our laws are behind the times, and my bill would start the long overdue process of updating them to give digital asset holders and investors basic protections.
What A Legal And Regulatory Framework Could Mean For Bitcoin And Crypto Investors
If approved, The Digital Asset Market Structure and Investor Protection Act will provide a statutory definition for Bitcoin and other cryptocurrencies. This has been a critical point for many companies and investors claiming that a clear classification would prevent lawsuits, such as the one on Ripple Labs and its executives over the alleged illegal sales of security, XRP.
If a cryptocurrency is deemed a commodity, such as Bitcoin and Ethereum, or security, they go under the regulation of the Securities and Exchange Commission (SEC) or the Commodity Futures Trading Commission (CFTC). These agencies have different rules and a very different approach when it comes to regulating digital assets.
In addition, the law would provide legal certainty for the top 90% of cryptocurrencies by market cap and trading volume, according to the press release. This point would be enforced with a joint SEC and CFTC rulemaking.
However, the act proposes that transactions “not recorded on a public distributed ledger” to register on a Digital Asset Trade Repository, the inclusion of cryptocurrencies and digital assets under the “statutory definition of money instruments” and the Bank Secrecy Act.
Thus, trying to make cryptocurrencies “comply” with regulatory requirements such as anti-money laundering policies, recordkeeping, and reporting requirements, the press release claims. In that sense, the act would ask the SEC, the CFTC, and other regulators to clarify which entities must register as money services businesses and securities or commodities exchange.
The law would even give the U.S. Treasury Secretary the ability to permit or forbid “U.S. Dollar and other fiat-based stablecoins”.
Although the act would provide Bitcoin and crypto investors with clarity on certain points, it seems to take a similar turn as other legislation proposed in the U.S. Senate. The bipartisan infrastructure bill looking to obligated certain entities to report their activities related to Bitcoin and cryptocurrencies. The bill has been heavily criticized by the crypto community.
1/ The new bipartisan infrastructure bill in the Senate includes new tax reporting obligations for crypto.
— Jerry Brito (@jerrybrito) July 29, 2021
At the time of writing, Bitcoin trades at $40,014 with a 1.3% profit in the daily chart.