Regulations: We knew they were coming… and here they come. After putting forward around 50 bills and resolutions regarding the blockchain, crypto, and central bank digital currencies (CBDCs), the Congress is chewing on some of the most comprehensive cryptocurrency regulations to be introduced thus far. The regulatory uncertainty surrounding digital assets has been a major worry in several significant economies. And, of course, the $15 billion TerraLuna crash has only increased the need for some regulation.
Yes, I said it – “the need for regulation.” Onerous regulations are a pain, sure, but I’m not seeing anything like that on my radar. I’m seeing some common-sense measures that will only help most crypto investors in the long run, and speed mass global adoption, too.
And besides – would Congress take up cryptocurrency if it were dead, as a lot of bears are saying right now? That they’re even having a debate is proof that we are right on the money and that we can expect the bull run to resume at some point.
There’s nothing to be afraid of, and there are even reasons to be stoked.
Here Are the Facts About Congress and Crypto
Highlights of the bill include provisions that protect miners from being treated as brokers, which tackles a controversial section of the recently passed Infrastructure Bill. It also grants the Commodity and Futures Trading Commission (CFTC) regulatory authority over much of the space and clarifies that cryptocurrencies aren’t securities – unless they are being offered to fund a company, such as an initial coin offering.
Congress is tackling crypto taxation, too. The Virtual Currency Tax Fairness Act of 2022 was introduced here as a bipartisan bill. The Act would excuse personal transactions made with virtual currency when the gains are $200 or less.
They’re tackling CBDCs, too. The Accountability of Cryptocurrency in El Salvador Act was introduced to direct the U.S. State Department to study the impact of Bitcoin in El Salvador, and its implications for the U.S. and the global financial system. Another bill, called the E-Cash Act, will focus on creating a digital dollar.
Congress is looking for clarity on the regulatory treatment of digital assets and digital asset securities. Included in these is the Blockchain Regulatory Certainty Act which offers protection for ‘noncontrolling’ blockchain services and software developers. The Token Taxonomy Act was presented to address the challenges faced by the SEC in referring to digital assets and digital asset securities.
Not all of these bills will pass, it’s true, and some that do pass might look different from the drafts available now. But at the end of the day, clarity and guard rails for digital assets will only help. I’ll be watching for you.
Chief Crypto Strategist, American Institute for Crypto Investors