Newly proposed US infrastructure bill accommodates crypto regulatory framework
A new bipartisan infrastructure bill in the US Congress includes a new framework to regulate the crypto market, as well as a plan to raise $30 billion through crypto taxes.
- Sponsor Rep., Don Beyer attributed the need for the regulatory framework to the “ambiguous and dangerous” nature of the existing digital asset market structure
- The new regulatory framework will apply to all cryptocurrencies including Bitcoin, altcoins, and other stable coins
- Businesses that deals with digital assets will be required to report cash payments surpassing $10,000
The United States Congress has just welcomed a bipartisan infrastructure bill that intends to raise about $30 billion from the crypto economy by introducing some new requirements for brokerages and investors alike.
According to Coindesk, (citing a draft copy of the bill), any brokerage that transfers any digital asset would be compelled to file a return under a modified information reporting system.
For clarity, measure from the new bill defines digital assets as “any digital representation of value… recorded on a cryptographically secure distributed ledger” or equivalent technology, and adds them to the statutory definition of “monetary instrument” under the US Bank Secrecy Act (BSA).
Also, by extension, the measure applies to decentralized enterprises such as exchanges, on-chain communities, and pair-to-pair marketplace among others.
In addressing the need for the new regulation, sponsor Rep. Don Beyer (D-Va.), chairman of the U.S. Congress Joint Economic Committee, claimed that the existing digital asset market structure and regulatory framework are too “ambiguous and dangerous for investors and consumers.”
While this new development is largely lauded as a positive step forward, it comes amid requests from a number of advocates for the US government to embrace central bank digital money (CBDC). Recall that the U.S. government has been largely called out for taking the back seat while more than 90 percent of the global economy turns toward CBDC.
The bipartisan bill introduces other new measures
To address this seeming setback, the new bill included new provisions such as the following (in addition to those mentioned earlier):
- Create statutory definitions for digital assets and digital asset securities, and provide the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) authority over digital assets and digital asset securities, respectively.
- Provide the Federal Reserve with explicit authority to issue a digital version of the U.S. dollar, clarify that digital assets, digital asset securities and fiat-based stablecoins are not U.S. legal tender, and provide the U.S. Treasury Secretary with authority to permit or prohibit US dollar and other fiat-based stablecoins.
- Direct the Federal Deposit Insurance Corporation (FDIC), National Credit Union Administration (NCUA), and Securities Investor Protection Corporation (SIPC) to issue consumer advisories on “non coverage” of digital assets or digital asset securities to ensure that consumers are aware that they are not insured or protected in the same way as bank deposits or securities, e.t.c
Beyer further estimates that there are over 11,000 different digital asset tokens in circulation, with a market cap of over $1.5 trillion, and that 20 million to 46 million Americans possess bitcoin and other digital assets, suggesting the urgency for crypto market regulation.