U.S. Representative Don Beyer, from the Democratic Party, has put forward a bill that would reshape the US regulatory framework for digital assets.
The proposed ‘Digital Asset Market Structure and Investor Protection Act’ aims to define the treatment of crypto products under existing laws in the United States.
In a statement explaining his move, Beyer said that "digital asset holders have been subjected to rampant fraud, theft, and market manipulation for years, yet Congress has hitherto ignored the entreaties of industry experts and federal regulators to create a comprehensive legal framework”.
His bill would force bodies such as the Securities and Exchange Commission to provide legal clarity for the digital asset market and would formally place these assets under the ‘money instruments’ definition, subjecting cryptos to existing anti-money laundering, record keeping and reporting standards. It would also create a new entity where transactions not made public on a Blockchain would have to be reported and recorded.
Under the proposed legislation, fiat-backed stablecoins would need approval by the Treasury before they could be issued, and existing dollar-pegged cryptos would not be exempt from this process.
"“This is a far-reaching set of proposals designed to help the United States’ financial regulatory framework catch up with the digital asset revolution; legislators will need to strike a balance between the need to regulate to protect investors without damaging the incredibly innovative mindset of the crypto world”, commented Fabio Asdurian, the co-founder and CEO of Dynasty Global Investments AG."
Whilst it is not clear whether Representative Beyer’s bill will be approved by Congress, the proposals highlight the debate over whether the US is failing to take a leading role in the crypto world.
Speaking in a recent Yahoo Finance programme, Allianz Chief Economic Adviser and President of Queen’s College at Cambridge University, Mohamed El-Erian, said the ongoing confrontational stance taken by political leaders against the crypto world can risk having the US and other countries falling behind China. El-Erian’s views were echoed by Dan Morehead, the CEO and Co-Chief Investment Officer at Pantera Capital. “China is six years ahead of the United States in building a blockchain-based payment system”, said Morehead.
Although reports about China’s crypto strategy have recently focused on its crackdown on bitcoin mining and trading operations by citing climate concerns, many analysts believe a key reason for their actions lies behind China’s development of its own state-backed digital currency, often referred to as DCEP, which could set global standards for the use of national digital currencies.