What is the Cryptocurrency Act 2020?

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The cryptocurrency Act 2020 is the new proposed by the U.S lawmakers that will see to the regulation of crypto transactions. The aim is to ensure that more clarification is provided on digital asset regulations, and has the tendency to restructure the crypto-system, especially in the U.S. The Act starts by categorizing the digital assets into three. The first is cryptocurrencies such as bitcoin, bitcoin cash, Litecoin etc. The bill describes them as digital assets resting on the blockchain. The second sis crypto-commodities which contain some fungibility. Fungibility refers to assets that are interchangeable, they also rely on blockchain. The last is crypto-securities, they are any coin that fails the Howey Test.

The crypto-assets are overseen by the Commodity Future Trading Commission (CFTC), the Securities ad Exchange Commission (SEC), and the Financial Crimes Enforcement Network (FinCEN). The CFTC oversees the crypto-commodities class. The Securities Token is proposed to be within the jurisdiction of the SEC, while FinCEN will be in charge of cryptocurrencies used as e-money. Although many have painted the proposed bill as a fight against the Facebook proposed stable coin, however, I believe the main goal of the bill is to enforce rules for crypto-system to play with.