Analysis: Here’s what the new crypto bill means for the Blockchain ecosystem?

Supporters of the cryptocurrency industry have been asking for a comprehensive cryptocurrency bill for some time. Thanks to the two-pronged efforts of Senators Cynthia Lummis (R-Wyo.) And Kirsten Gillibrand (DN.Y.), there are proposals on the ground that lawmakers can think about.

The new cryptocurrency bill comes at a time when the growth of the cryptocurrency ecosystem is becoming more complicated, with investors’ protection concerns coming from various scams and scams aimed at the average investor. The bill seeks to address so many of the gray areas of the digital currency ecosystem, including taxation, regulatory oversight and the role of stable coins, to name a few.

The new crypto law, if passed, will put the United States on a clearer pedestal with regard to the handling of digital assets, which has largely come to stay.

Chris Terry, board member of BPSAA and VP Enterprise Solutions at SmartFi spoke to Blockchain.News that he thinks IIf this bill were passed, it would be great for the crypto industry and clearly put the United States in a leading position.

«What is interesting about ‘Lummis-Gillibrand’s law on responsible financial innovation; are the things that most of the press do not talk about, such as Section 505 – your right to own your own keys or Section 502 Definition of source code. They discuss Defi in section 805 and even Digital Yuan in section 603. This shows that these two senators have deep knowledge of cryptocurrency and blockchain technology. Honestly, I was very impressed with the bill. The challenge will be to get the rest of Congress to act on it. “

Highlights from Crypto Bill

Described as a “landmark account” by Sen Gillibrand, the crypto account has a number of functions, including the definition of crypto as either securities or commodities. Over time, US crypto investors and stakeholders are often torn apart as to how to classify which product they are developing, a move that will determine which regulator they will be subject to.

With the new bill, all token issuers will gain clarity in the products they release, drawing on direct knowledge of “the purpose of the asset and the rights or powers it imparts to the consumer.” The bill identifies exclusively the majority of digital currencies, including pioneer Bitcoin (BTC) and Ethereum (ETH), the largest smart contract protocol, which goods.

As commodities, the bill will seek to give enormous powers to the Commodity Futures Trading Commission (CFTC) as the largest supervisor of the emerging industry. Crypto supporters, in their cry over the years, have often called for a new regulatory body to be set up to properly identify industry developments. Although the bill is not open access to a whole new body, the recognition of the CFTC is a major step towards stopping all forms of confusion.

Fraud and fraud are almost always intertwined with the crypto industry. Several reports of fraud have bankrupted stock exchanges such as the case of MtGox and QuadrigaCx. Although these examples do not necessarily have a direct meaning as the stock exchanges were based in the United States, most serve American clients.

For the stock exchanges incorporated in the United States, the new bill provides for the storage of digital assets in the event of bankruptcy or accident leading to the disqualification of the trading platform.

There was a big uproar last year when there was a dispute over the use of the word cryptocurrency brokers when the tax deduction for units in the digital currency ecosystem was considered to fund President Joe Biden’s infrastructure bill. The new bill also defined crypto-brokers in an attempt to protect wallet service providers and miners from protecting them from certain tax reporting requirements.

Another important highlight of the bill is that it exempts transactions of $ 200 and under from taxation, while requiring a “100% reserve, asset type and detailed disclosure requirements for all payment stack coin issuers.”

With risk financing an important trend in today’s crypto ecosystem, the new bill also calls for data transparency and disclosures across the board.

Styliana Charalambous, Head of Investment and Market Research at Pure, spoke to Blockchain.News through an email. Charalambous commented on the consequences of tHe also demands certain revelations to the SEC from companies that raise money through the sale of digital assets.

“The approach will ensure that market participants and our securities-regulating community receive detailed and accurate disclosures about the highly traded digital assets, but in a way that encourages innovation.”

Wider implications of Crypto Bill

The development of the bill may not serve the interests of a few stakeholders with irrelevant claims, but if it is approved, it will have a broad impact in the United States and beyond.

“The bill should also have a calming effect on investors’ fears regarding a regulatory tightening of certain projects. Projects that are not yet sufficiently decentralized will be required to submit minimum information to the SEC that will be less burdensome than current procedures, but still useful to investors, “Styliana added,” When the project is fully decentralized, these reporting requirements will be terminated, and compliance . costs reduced. On the global stage, this will also allow cryptocurrency exchanges to feel more comfortable listing projects where the associated cryptocurrency has real benefit. “

Apart from the United States, many countries are trying to step up their game by providing adequate regulatory oversight of the crypto ecosystem. In fact, the recent collapse of Terra’s algorithmic stablecoin has particularly accelerated processes that have led to the introduction of comprehensive stablecoin regulation in Japan, the first country to do so.

With the US crypto bill, innovations from the Web3.0 world will not only be promoted. Several countries may eventually throw their weight behind the innovative cryptoecosystem and choose not to miss the innovations that space heralds, as Galymzhan Pirmatov, chairman of the National Bank of Kazakhstan, recently noted.

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