Regulations for Cryptocurrency: What Every Crypto Enthusiast Should Know
Since the beginning of civilization, human beings have been living with rules. As society progressed, people formed regulations for everything. Technology doesn’t fall out of its ambit. In fact, it requires to be regulated more than anything else. That’s exactly what the leaders have been trying to do with cryptocurrency.
After more than a decade of its inception, users are finally talking about statutes regulating digital assets as the governments have now accepted that they have to embrace crypto. Therefore, regulators across the globe have done the legwork or are busy doing so. People have already heard about MiCA. The European crypto regulation will be implemented in a couple of years.
But there are other drafts that have been thoughtful. Soon, politicians will table and implement them. Before that happens, it’s important for crypto enthusiasts to know all about them.
Four Crypto Regulations Every Crypto Enthusiast Must Know
Global leaders have proposed these regulations for the smooth adoption of digital assets. They also address issues of security and jurisdictional concerns.
Financial Innovation and Technology for the 21st Century Act
Republican members of the Agriculture and Financial Services Committees of the US introduced the 21st Century Act in July 2023. The bill focuses on ascertaining the true nature of digital assets. It would examine a crypto and decide if it’s a security or a commodity. Also, it would determine the jurisdictions of the regulators.
It would empower the Futures Trading Commission (CFTC) to regulate digital commodities. Furthermore, the body will decide SEC’s sovereignty too. With the power of classifying digital assets, the bill would make the regulatory framework clear for the crypto firms.
Responsible Financial Innovation Act (RFIA)
RFIA brings protection laws to prevent occurrences like FTX. It would determine the precise role that regulators like SEC and CFTC would play. Furthermore, it would cover digital asset taxation. It would make the Federal Reserve accountable for verifying crypto firms’ transactions. As a result, it would enable crypto firms to get credibility from the banking system.
Going further, it would give exclusive rights to launching stablecoins to depository institutions. Moreover, it includes the decentralized autonomous organizations (DAOs) under the taxation framework.
Digital Asset Market Structure Bill (DAMS)
This also determines the working of regulatory bodies. Besides that, it would foray into labeling cryptos as commodities or securities. The draft states that every crypto will undergo a certification process that the SEC will oversee. On top of that, it’d enable crypto exchanges to register with the SEC as an alternative trading system (ATS). It regulates ATS and allows them to deal with stablecoins and other digital commodities.
Digital Commodity Exchange Act (DCEA)
DCEA empowers the CFTC to register and regulate the spot exchanges. It was introduced for the first time in 2020 but was revised and reintroduced in April 2022. The updated bill includes stablecoin providers in fixed-value digital commodity operators. In addition, it would enable any crypto project to register with the CFTC.
Once implemented, these regulations can certainly make things better for the entire crypto world. The good thing is, the government is acknowledging the issues of crypto users and service providers. Hopefully, these regulations will make crypto a mainstream fintech solution soon.