There are two forces at play here, and one is a decentralized network of cryptocurrencies. On the other hand, centralized finance owned by governments, banks, and financial institutions has converged on making their own tokens to tackle it. But instead of being anonymous and decentralized, they will be highly regulated and controlled entities. Today’s new bill directs U.S. Federal Reserve to work with dedicated authorities for the issuance of the digital dollar. Don Beyer from Virginia has put together a legal framework that will regulate digital assets across the board.
Role of SEC and CFTC
The bill is believed to be the very piece of the puzzle that was missing to control the overreach of cryptocurrencies and their use within the U.S. It covers almost all the important gray areas exploding on the chessboard as far as cryptocurrencies and decentralization are concerned. One of the significant roles this bill has to play is to explain what a digital asset is and narrate the difference between a digital asset and digital assets securities. The bill also brings digital assets under the jurisdiction of the Commodity Futures Trading Commission, and as far as the securities are concerned, these will be referred to Securities and Exchange Commission.
Both these organizations working under the light of this bill are advised to provide legal clarity whenever needed and to update the regulatory status for about 90% of these crypto-assets ranked by market capitalization and their trading volume within the crypto market. This bill also rules in the Bank Secrecy Act. According to it, the bill will be formalizing the very regulatory requirements for these assets and securities and classifying both as the monetary instruments to bring forth transparency and enforcement regarding anti-money and reporting any laundering.
As for the central bank digital currencies, the bill has provided Federal Reserve with all the authority for the issuance of the digital dollar while being designated as the only institution to be able to do so.