According to Forbes report yesterday, 2019 is coming to a perfect end just as the U.S. Congress prepares for a holiday break. Because of the importance American lawmakers attach to Facebook's launch of the Libra project, a bill that provides a comprehensive regulatory framework for digital assets including cryptocurrencies has surfaced.
The bill is called the 2020 Cryptocurrency Act, and its purpose is to state which federal agencies regulate digital assets and require these agencies to publicly announce whether the creation or trading of such assets (or any other use) requires a federal license, certification or registered.
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The preliminary review of this draft includes:
1. Assign the definition of "Federal Digital Asset Supervisor" or "Federal Cryptocurrency Supervisor" to three agencies: the Commodity Futures Trading Commission (CFTC), the Securities and Exchange Commission (SEC), and the Financial Crimes Enforcement Network (FinCEN). (Note: cryptocurrencies are regulated by these three institutions)
2. Divide digital assets into three categories: cryptocurrencies, crypto commodities, and crypto securities.
3. Federal cryptocurrency regulators are responsible for one of these types of assets and are the only government agency authorized to regulate:
- CFTC-crypto commodities
- SEC-Crypto Securities
4. Every federal cryptocurrency regulator must be open to the public and maintain a complete federal license, certification, or registration process that applies to the creation or trading of digital assets.
5. Requires the Minister of Finance, through FinCEN, to establish rules for similar financial institutions to track cryptocurrency transactions.
The draft defines the relevant terms in detail as follows:
In the description of encrypted goods, its definition is: a) economic goods or services that have complete or substantial substitutability; b) the market does not consider who produced these goods or services; c) is established on the blockchain Or on a decentralized password ledger.
Cryptocurrency is defined as a representation of US currency or synthetic derivatives based on a blockchain or decentralized crypto ledger. The types included in this definition are:
(1) This form of expression or synthetic derivative is a digital asset supported by a reserve and is fully guaranteed in an agent bank account (such as a stablecoin).
(2) Synthetic derivatives set by a decentralized oracle or smart contract; and collateralized by crypto commodities, other cryptocurrencies or crypto securities.
Crypto securities refer to all debt, stocks and derivatives based on blockchain or decentralized crypto ledger, with one exception. Applicable to synthetic derivatives registered with the Ministry of Finance and operating as a money service provider, while complying with all Bank Secrecy Acts and all other federal anti-money laundering, counter-terrorism, and surveillance requirements from the Foreign Asset Control Office and the Financial Crimes Enforcement Network.
"Decentralized oracle" refers to a service that is responsible for sending and verifying real-world data from external resources of the blockchain, and submits this information to the smart contract based on the blockchain, thereby triggering the predefined definition of the smart contract Features.
Reserve-backed stablecoins are defined as currency representatives based on blockchain or decentralized cryptobooks issued by the United States or foreign governments, are linked to this currency 1: 1, and are fully guaranteed in agency bank accounts.
"Synthetic stablecoin" refers to a digital asset, not a reserve stablecoin, which maintains a stable value relative to currency or other assets; and is built on the blockchain or decentralized crypto ledger.
Selected Federal Cryptocurrency Regulators: SEC, CFTC, FinCEN
These three regulators are defined as the regulators of new digital assets in the federal government, and there are multiple indications that they play a common role in this new asset class, just like the Federal Reserve, the Federal Deposit Insurance Corporation (FDIC), and the currency regulator The Agency (OCC) coordinates the management of large US financial institutions. On October 11, the heads of the three regulators wrote a joint statement on activities involving digital assets to fulfill their obligations under the BSA (Bank Secrecy Law).
FinCEN is responsible for establishing rules to track transactions
The bill will require the U.S. Treasury Secretary to issue rules through FinCEN, requiring transaction tracking for each cryptocurrency (including synthetic stablecoins), as well as those involved in such transactions, similar to the government's requirement that financial institutions monitor currency transactions.
Last October, CFTC, FinCEN and SEC jointly issued a joint statement on digital asset activities. If the bill is passed, it will further strengthen the coexistence of these three institutions as "federal cryptocurrency regulators" that oversee digital assets.
Although many companies may already consider the SEC and CFTC to be the regulators of these new digital financial instruments, FinCEN under the U.S. Treasury is often considered more of a law enforcement agency than a traditional financial services regulator. FinCEN director Kenneth Blanco stated at a blockchain seminar in New York on November 15:
"You should tell your inspectors, your regulators, such as FinCEN, how do you mitigate risks … judge potential suspicious activities, and comply with reporting and record-keeping requirements-including rules for capital flows. You will always be asked during an audit To these. "
The full version of the draft can be obtained here . By 2020, after hearing the industry's opinions and making changes, we are likely to see the bill approved as the New Year approaches.