New Cryptocurrency Bill Aims To Regulate Digital Assets

Rep. Don Beyer, out of the blue, recently introduced a cryptocurrency bill that would allow the Treasury Secretary to reject the creation of stable coins, allow the creation of a charter for crypto exchanges, force regulators to define rules for (Defi) decentralized finance, and more. The bill titled “Digital Asset Market Structure and Investor Protection Act” was introduced by Beyer on Thursday and seeks to establish regulations in a space where there are currently little to no regulations. It would do so by dividing different cryptocurrencies into either securities or commodities. The bill covers a lot of things and appears to have been a result of thorough research. The bill’s introduction is surprising, especially because of the person who introduced it. Beyer is at present the chairman of Congress’ Joint Economic Committee, and his interaction with digital assets like cryptocurrencies has been pretty limited. A spokesperson for Beyer mentioned that this bill has been in the works for over a year.

“For a proposed legislation that seemingly came out of nowhere, it is incredibly comprehensive, and the authors clearly have an understanding of the underlying technology,” Marc Goldich said, who works at the law firm Axler Goldich LLC. “It’s going to take some time to unpack and see how it could impact the industry and it will be interesting to see if this bill has legs, but this is the most well-written draft of crypto legislation to date.” The bill also gives the country’s central bank, the Federal Reserve, the authority to create a central bank digital currency (CBDC) which might be in response to the statements from officials at the Federal Reserve who recently mentioned that they don’t know if they have the authority to create a digital asset of such sorts. Beyer’s bill is the second one this week that focuses on digital assets, particularly cryptocurrencies. A recent bipartisan infrastructure bill in the Senate contains a provision that seeks to enforce a wider set of information reporting requirements for cryptocurrency users in the country by raising twenty-eight billion dollars.

The most important aspect of Beyer’s bill is perhaps a provision that focuses on “desecuritization.” This particular section lays down the pathway for a digital asset security to become a cryptocurrency, which could help new crypto projects to take off. “Registration of any class of digital asset security pursuant to this subsection or status as a security (or both) shall be terminated ninety days, or such shorter period as the Commission may determine, after the issuer files a desecuritization certification with the Commission,” the bill reads.

The bill also mentions the creation of a version of the US dollar that’s based on blockchain technology. “The Board of Governors of the Federal Reserve System, after consultation with the Secretary of the Treasury, is authorized to use distributed ledger technology for the creation, distribution and recordation of all transactions involving digital Federal reserve notes,” the bill reads. “The said notes shall be obligations of the United States and shall be considered legal tender and shall be receivable by all national and member banks and Federal reserve banks and for all taxes, customs, and other public dues.”