Players, observers, lobbyists as well as lobbyists consider this a critical moment for crypto and its influencers. Passing officials now or not will determine whether regulation can accelerate or slow down the digital gold rush.
What’s at stake?
Here are four of the major issues facing crypto-lobbyists:
Reputation. The impression that crypto facilitates crime is frequently voiced by legislators and regulators, and it remains a major obstacle to legitimacy. The Crypto Council’s first publication is an analysis of the illegal use of Bitcoin, and concludes that concerns are ‘significantly overestimated’ and that blockchain technology can be better used by law enforcement to stop crime and gather intelligence.
Reporting requirements. New anti-money laundering rules adopted this year will significantly expand the disclosure of digital currencies. The Treasury has also proposed rules that will require detailed reporting for transactions over $ 3,000 that include “unvested wallets” or digital wallets that are not associated with a third-party financial institution, and require institutions that handle cryptocurrencies to provide more data process. The Financial Action Task Force, an intergovernmental watchdog and standard agency, recently provided draft guidelines on virtual assets that require service providers to provide further information.
Uncertainties of securities. When is a digital asset a security and when is it a commodity? Not technically a mystery, but this question has surprised regulators and innovators for some time. Bitcoin and other cryptocurrencies released via a decentralized network usually qualify as commodities and are less heavily regulated than securities, which represent an interest in an enterprise. Tokens released by individuals and companies are likely to be characterized as securities because they more often represent an interest in the issuer’s project.
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The Securities and Exchange Commission sued Ripple Labs in December, accusing it of selling unregistered securities in the form of a token called XRP. Ripple insists that XRP is a commodity. A decision in this case could be a watershed to determine how to properly characterize cryptocurrencies in the future.
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This week, SEC commissioner Hester Peirce published an updated “safe haven” proposal that gives developers a free period to issue a sign without fear of mischaracterization and to keep regulators informed. “The idea is to give people a three-year job,” she said. Peirce said.
Catching up on China. The Chinese government is already experimenting with a central bank’s digital currency, a digital yuan. China would be the first country to create a virtual currency, but many are considering it. Some crypto advocates are concerned that China’s space crisis threatens the dollar, national security and US competitiveness.
In business today
For more information, see our previous weekend issue on the future of crypto-regulation.
Meet me in the lobby
“With any new industry, it’s not easy to figure out Washington,” she said. Peirce, the SEC commissioner, said. Joining a strongly regulated industry such as finance and talking about technology that few officials understand only exacerbates the difficulty for the crypto crowd.
Since joining the SEC in 2018, Mrs. Peirce is a big supporter of blockchain, both in the power halls and in crypto-inner circles, and shares her thoughts on hot topics such as when there will eventually be a Bitcoin exchange-traded fund in the United States. State. (In her opinion, not fast enough, but maybe soon.)
As the sector declines, some things will become easier, even as the landscape of players becomes more complex. Blockchain companies will increasingly talk to regulators who understand their language, Ms. Peirce said, as did the new SEC chairman, Gary Gensler, a former MIT professor who offered crypto classes and was casually confirmed on the day Coinbase listed.