How will the US election affect crypto legislation?

Source: Crypto Valley Live
Author: Aislinn Keely
Translation: Zoe Zhou
  • In 2019, dozens of bills on digital currency and blockchain policies were introduced into the US Congress. These bills are likely to progress in Congress in 2020.
  • Despite the 2020 presidential and congressional elections in the United States, more proposals are likely to be made in the US Congress, some of which may trigger further dialogue.
  • At present, the Research Bill is most likely to be passed, but policy advocates say lawmakers are still considering the impact of the crypto industry on global markets.

In 2019, the U.S. House of Representatives passed a series of bills related to cryptography and blockchain. Although there has been increasing interest in establishing a regulatory framework since Facebook's release of the Libra white paper, policy advocates say they don't expect much change in 2020 regulatory policy.

The Digital Currency Center has confirmed that at least 27 bills on encryption and blockchain will be introduced in the House of Representatives in 2019. Many bills have also been put on the agenda in the last months of 2019. Most of the bills have been submitted to the relevant committees, and two other Fintech Protection Acts and the Fight Against Illegal Cyber ​​and Reconnaissance (FIND) Transactions Act have been submitted to the Senate.

Policy advocates say both bills are "research bills" and are easier to move in both houses. The FinTech Protection Act will set up a task force to combat terrorism and illicit financing and reward terrorist conviction information for the use of encryption technology. Similarly, the Anti-Illegal Cyber ​​and Reconnaissance (FIND) Transaction Act will create a working group to examine how digital currencies are used for sexual and drug trafficking.

Impact of election year

Policy advocates believe that such legislation may change in 2020 without more specific and meaningful policies. In addition to the US Congress itself facing a new round of elections, Washington's presidential campaign is likely to consume most of the energy of both houses.

Kristin Smith, executive director of the Blockchain Association, said that in the context of the election year, the replacement of seats in the United States Congress will become the focus of attention, so there will be no major breakthroughs in the legislative process. However, this is not the reason for the suspension of the dialogue.

She said: "I think the new crypto-related legislation is relatively unlikely to pass in 2020. There may be some small research bills or some small initiatives, but this does not mean that they are not worth studying and Debate because it will lay the foundation for the next U.S. Congress. "

In addition, she also expects the Senate to introduce some measures this year, but the details are still unclear.

She said: "We are not entirely sure who the leaders will be. But we have talked to many government agencies and learned that there are things going on, such as possible changes to the House's Token Classification Act. .

Bill under consideration

The Blockchain Regulatory Certainty Act is one of the bills under consideration, which has the support of U.S. Representatives Tom Emmer and Darren Soto, who represent both parties.

Neeraj Agrawal, director of communications for the digital currency research and education institution CoinCenter, said the company is particularly interested in the bill. The bill will create a safe haven for unmanaged crypto entities in accordance with national licensing requirements. The bill has been submitted to the House Financial Services Committee and the House Judiciary Committee.

Policy advocates will continue to promote the passage of the Token Classification Act. Several sources have pointed out that the House is expected to continue to advance the bill. Smith said that although the momentum is not strong, advancing the passage of the bill will remain the top priority of the Blockchain Association in the coming year.

The revised Securities Act of 1933 and the Securities Exchange Act of 1934 excluded digital currencies from traditional security assets. However, regulators say securities laws are ready for the digital revolution because they are "technical agnostics."

Although election year stimulus has slowed down government agencies in Washington, Smith said at least one bill could move further.

"The Managed Stablecoins Are Securities Act that has been proposed does have a chance to pass through the House Financial Services Committee. Therefore, we will continue to work with the relevant departments of the bill to ensure that it is more stringent and does not exceed the bill Expected range. "

At the end of November last year, U.S. Rep. Sylvia Garcia (D-TX) introduced the "Managed Stablecoins Are Securities Act." Garcia explicitly mentioned Libra in a statement announcing the bill, stating that Libra and other managed stablecoins are clearly securities under current law. Clarifying the regulatory structure of these digital assets can protect consumers and ensure proper government oversight.

Unsubmitted bill

In addition, there is a bill in Washington that has not been submitted for voting.

The much-anticipated Cryptocurrency Act (2020) was proposed in 2019 by U.S. Rep. Paul Gosar in draft form. The bill will further define the regulatory powers of institutions such as the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC), and divide different digital currencies into different categories within the purview of each regulatory agency.

Multiple sources said Washington did not take the bill seriously. Smith said this is because the power to push the bill is not part of the relevant committees, nor does it show the same understanding of authority as other bills.

She said: "In any case, we don't consider this a serious legislative proposal. The people involved in drafting the bill are not in the relevant committees and have no relevant expertise. We do not support advancing the bill. So I can't imagine it can be used in Going further in parliament, and apart from acknowledging its existence and providing resources for it, I will not do anything else for the bill. "

Policy-based framework

This raises the issue of the education of parliamentarians. John Collins, a partner at FS Vector, said that parliamentary education remains a problem for the US Congress.

"Educators still need to be educated on technology and business models, but as everything is rapidly changing, considering these developments through a principles-based framework will benefit every innovator, consumer and regulator. "" Principle-based framework "refers to a review of industry needs and risks. Legislation can mitigate related risks while leaving room for technological growth.

"No matter what technology may bring, we have to build a framework to deal with these issues. Otherwise, you will end up unable to adapt to the rules. As a result, innovation may weaken, and criminals may find loopholes. Therefore, no one will eventually Will survive. "

CFTC Chairman Heath Tarbert mentioned in a speech at Harvard University last October that such a framework is "flexible and widely applicable."

Some observers say that much of the legislation is conservative and not principle-based, especially after the Libra incident. But Smith said that's not exactly the case.

Smith said that although the "Managed Stable Coins are Securities Act" is clearly a response to the Libra incident, the industry as a whole has responded accordingly.

"I think it's a new technology to others, it doesn't exactly fit into the existing regulatory structure, and we do need Congress to intervene, at least to provide a general framework for how different government agencies interact."