The crypto space woke up this week to an interesting development. Rep. Paul Gosar (R-AZ) had introduced the cryptocurrency act of 2020 to the US Congress.
One fact about the submission was clear: He went solo. Submissions usually have co-sponsors. This case shows that we are still a long way from the broad adoption that the cryptospace hopes for.
The bill classified digital assets into three categories: Cryptocommodities, cryptocurrencies and crypto securities. as per the bill, Three Agencies will regulate each category: The US CFTC, The US treasury’s Fincen and the US SEC.
The Act is a great start to defining new rules for the cryptospace in the US. The concept of “primary” regulation creates both problems and opportunities for many. It also narrows the definition of digital assets to certain use-cases.
Nevertheless, there are issues with the Act. Section 6 (16-21) includes operations of tracking transactions by the US Treasury FinCEN. The tracing will be based on “instructions” from the Treasury Secretary.
The trailing of transactions applies to the cryptocurrency class of digital assets. Government interference in the cryptospace will raise opposition to the bill.
This sort of action is also to be expected by the Government because of one word: currency.
Governments are flat out concerned about the control of their money supply. And private minting of tokens is bound to create problems down the line. Speaking about lines, the government’s privacy invasion is an issue as well.
The purpose of tracing transactions seems clear. Financial transactions that have criminal origin might use the pseudonymous nature of digital assets to launder their funds. We all face the same thing when it comes to the US dollar.
My verdict?: Tracing transactions don’t go well with the decentralized nature of crypto but isn’t really a problem if you have nothing to hide. The hue and cry that the cryptospace is making about this are unfounded as this could be the road to adoption.