A new version of the cryptocurrency law by US Congress

Colin Baseman

In March, US Congressman Paul Gosar presented an updated form of the current law on cryptocurrency. This bill intends to regulate the segment of virtual assets in America and determine the status of crypto assets. Lawmaker's representative Will Stechschulte said that the novel law will not only bring transparency but also make cryptocurrency assets legitimate in the US.

What's new in the updated crypto regulation?

Congressman's proposal involves several innovative additions to the earlier adopted Cryptocurrency Act 2020, that was issued last year. The new regulation which is being developed by the US congressman intends to classify cryptocurrency into three classifications. The regulation divides crypto assets into these groups: crypto – exchange asset (namely cryptocurrency), crypto – security along with cryptocurrency.

The law also assigns each category its Federal controller: the SEC  will control crypto – securities and FinCEN will take over the digital currency CTFC will manage the crypto – exchange commodity. Each of the agencies can control their separate digital commodities.

Proposed regulators in accordance with the Cryptocurrency Act

The proposal clarifies that some virtual assets are heavily contingent on the US currency, for example, stablecoins, and the new regulation will bring USDT tether-type coins under the US.

It is noteworthy that according to this classification, Bitcoin falls into the grouping of a crypto – exchange commodity, and not a digital currency. Digital assets classification comprises the currency of the US or else synthetic derivatives representation, which falls under USDT and other stablecoins. As for crypto-security, it is an equity, liability, and derivative tool created on the grounds of the blockchain.

Unlike the original version of the act, which appeared back in December 2019, the modernized draft includes expanded definitions of certain terms, including a decentralized cryptographic registry in addition to smart contracts.

A decentralized crypto registry is an autonomous digital ledger protected by special minting mechanisms, comprising PoW, PoS, and other forms. It is indisputable and not subject to rewriting, and it also needs cryptographic connectivity between blocks of transfer data. Third-party authorizations are not essential, but only a connection to the global network is required. All transactions are final so are not controlled by anyone-either individuals or administration entities.

In the fresh version of the bylaw, the expression smart contract is described as a computer Protocol that is designed for digital simplification, verification as well as compliance with the terms of a contract without the participation of third parties.

Gosar's communications Director named Ben Goldie, mentioning the situation for the Cointelegraph portal, said: since this subject is a niche, the process was conducted with industry representatives, along with external teams and specialists. This allowed us to reach the lucidity/ transparency that the crypto market has long needed.

One of the agents of the digital industry, who took part in the creation of the law, was previously a BTC financier. The investor Eric Finman stated that the regulation, published at the end of  2019, was the second one in a row. It also had about 30 other versions.

The lawmaker wants the USA to lead the crypto market

According to Paul Gosar, it is vital for the United States to remain the world frontrunner in cryptocurrencies. As this expertise spreads to developing markets, the USA can carry on to lead the improvement of e-currency. He clarified that America just can’t be apart from its progress.

The congressman noted that backing the "Cryptocurrency Act of 2020" guarantees that the US will be at the epicenter of the prospect of banking, commerce, and others. He ended his speech by encouraging politicians to support the law for the life sustenance of their citizens.

Many hope that the law, presented by Paul Gosar, will clarify the situation around digital coins, awarding the latter with much-needed specific definitions.