Alrighty, I have a juicy little topic to talk about. It is about the alleged Crypto-Currency Act of 2020 (You can read it yourself HERE), which apparently goes over what I would consider pretty sweeping potential crypto legislation in the United States. Apologies to my friends and readers in other countries, I know just a little about what's going on out there. However, government is government, and you might see something similar pop up in your neighborhood, too. Well... Maybe. Let me explain.
Catching Wind, and Getting a Little Whiff of Bullshit
Just like everything else in Crypto, I am a HUGE advocate of DUE DILIGENCE. In our Brave New World, we shall not Trust. We Shall VERIFY! So, after this little tidbit of information comes across my feed about some new Crypto Bill, I went balls deep into the story and tried to dig up as much as I could. So it starts with Forbes as far as I can tell, which is of course reporting based on some cool new information one of their contributors got from one of their sources. This was really late last year. It feels like I could put some stock in. It's Forbes for Chrissakes. Unless this guy was getting trolled (He used to be a regulator with the FDIC) you can probably count on him giving us some solid information. In any case, who would benefit from this kind of obfuscation?
But still... That's kinda weird, isn't it? Unless the Draft Bill was leaked, wouldn't it be odd to see a preview of the bill before it was introduced? And that's another thing too. In order to spare my readers their sanity, I spent several hours combing through the US Congress Website. Apparently the guy responsible for proposing this bill is some Tool named Paul Gosar. He's the brains behind the operation, and while I don't wanna get too political on this, the fact that this particular guy is behind it could be a problem. He's... Interesting. And Devilishly Handsome... in a "My mom cut my hair with a Flo-Bee after Sunday School" Kind of way:
You're the Brunt of the Jokes Today, Paul. I've had my fair share.
Here's the thing; If the Crypto-Currency Act of 2020 was introduced at any time by this guy, it would had shown up under his "sponsored bills". As far as I can tell, it isn't there at all. Nothing. That doesn't mean that he won't introduce it sometime this year. A lot of other "Crypto-News" Sites have reported on this (HERE and HERE, for example), and have alleged that it has actually been introduced. It hasn't, far as I can tell. Forgive my Pejorative English, but I'm guessing these website contributors can't be fucked to do a little basic research.
Anyway, Because I know that Legislators and other Government Lackies want a piece of the Crypto Pie (Who the hell doesn't), I'm taking this draft bill as legitimate, but also with a grain of salt. You should too. Because The Quickest and Easiest Way to Alleviate FUD (Fear, Uncertainty, Doubt) is a Little Bit of Rationality. Don't believe everything you read, but don't be afraid to play the "what-if" game. Reasoned projections for the future are what makes for good action.
So... What Does It Propose?
So the first thing it does is introduces three separate definitions that they collectively label "Digital Assets":
1.) Crypto-Commodity. A Crypto "Good or Service" that's fully or substantially fungible. What does that mean? Pretend you borrowed a T-Bone Steak from your neighbor. If you returned another T bone steak to him after consuming the first one, he'd likely be happy. After all, a T-Bone is a T-Bone. It's fungible. You couldn't do the same if you borrowed your neighbor's car and returned a completely different car. That's a no-go and a non fungible asset. and would probably land you an ass kicking from your neighbor.
2.) Crypto-Currency. Basically, any crypto that can be used as a fiat-reserve substitute for the US Dollar (Like stablecoins), or a "synthetic derivative" (meaning value isn't derived directly from the US dollar, and is based on its own supply and demand). Basically, they wanna treat say, Bitcoin as Casino chips.
3.) Crypto-Security. This one is.. difficult. In their words it is "all debt, equity, and derivative instruments that rest on a blockchain or decentralized cryptographic ledger." It's a broad definition to say the least. They make exceptions for those assets that follow federal law as a "Money Service Business" or is otherwise in compliance with the Bank Secrecy Act and other laws related to curbing terrorism, money laundering, etc.
So, the next portion of the bill covers who gets to regulate which defined "Digital Asset" and how. (1) is to be regulated by the Commodity Futures Trading Commission (CFTC), (2) is to be regulated by the Secretary of Goddamn Treasury though the Financial Crimes Enforcement Network (FiCEN), and (3) is Governed by the good ol' Securities & Exchange Commission (SEC).
Feeling nauseous yet? Here's the final bit; In they very least, they have the common decency to tell you ALL the licenses and registrations you need to both create and trade Crypto! How exciting.
My Biased Asshole Opinion
If you can't tell already, I don't like it. I don't think the answer is to slather on a fifty foot layer of Bureaucracy onto Crypto. The definitions are generally unclear or super broad. Imagine the nightmare of taking your up-and-coming project and having to shove it through a million pieces of paperwork just to determine which "Crypto" yours falls under. Oh BTW, did you pay your Digital Asset and Developer/Trader Registration fee? No? Going to jail.
What is incredibly ironic is that a Republican wants to introduce this bill (at least, I figure if he made it, he wants to sponsor it). Typically, they want less regulation and government intervention, so that's kinda weird.
I sincerely believe that cryptocurrency was not meant to be regulated by some monolithic organization. It just goes against the zeitgeist of the movement and the idea that money should be free of corrupted influence. Sure, we have problems in the space, but I don't think it's more than we can handle as a community. I think that this type of stuff - if passed - would only serve to bottleneck mass adoption and the influence of decentralized currency.
If this is true, they're wanting to make things messier. More complicated. They want to raise the barriers to entry so that the control is in the hands of the few instead of the many. I do believe there should be rules, but not like this. Not at ALL like this.
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Until Next time... Don't Tread on My Magic Internet Money.