US Congressman Wants To Make America “Go-To” Country For Blockchain Innovation
By establishing a regulatory environment that is conducive to the growth of blockchain technology and digital assets, a member of the United States Congress plans to advance these areas in the United States.
A newly established committee in the United States congress that caters to the innovation of digital currencies has been making rounds in the media to promote America as the primary blockchain innovator in the cryptocurrency industry.
However, in order for this to become a reality, it will be necessary to enlist the assistance of other government agencies, such as the United States Securities and Exchange Commission. When it comes to virtual currencies, the US SEC has adopted a reckless stance. The US SEC has indicated that a large number of digital currencies and initial coin offerings (ICOs) may be regarded as securities and are therefore subject to federal rules governing securities. On the other hand, the government body has not published any updated recommendations regarding the question of whether or not a cryptocurrency can be regarded a security.
The US Securities and Exchange Commission neglected its responsibility to safeguard investors
The US Securities and Exchange Commission has stated that cryptocurrencies and other digital assets may be considered securities and therefore subject to federal securities laws, including the registration requirements of the Securities Act of 1933 and the investment company registration requirements of the Investment Company Act of 1940. The SEC has also stated that the Howey test, which is used to determine whether a financial instrument is a security, can be applied to cryptocurrencies and digital assets.
But these laws are prehistoric, and we should have new laws and regulations. Cryptocurrencies and digital assets are a relatively new and rapidly evolving market, and there is debate about whether existing laws and regulations are sufficient to address the unique characteristics of these assets. Some argue that new laws and regulations are needed to better protect investors and ensure the integrity of the market. Others argue that existing laws and regulations can be applied in a flexible and adaptable manner to address the challenges posed by cryptocurrencies and digital assets.
The current head of the SEC is Gary Gensler. He was sworn in as the Chairman of the Securities and Exchange Commission on April 14, 2021. Prior to that, he was a professor of the practice of global economics and management at the MIT Sloan School of Management, where he taught courses on blockchain technology, digital currencies, and financial technology. He also served as the chairman of the Commodity Futures Trading Commission (CFTC) under the Obama administration.
The Chairman of the SEC, Gary Gensler, and the agency are facing challenges in developing regulations for the cryptocurrency and digital assets markets. The SEC has stated that it is actively monitoring the market and may propose new regulations or interpret existing regulations in a way that would apply to cryptocurrencies and digital assets. However, it is also important to note that the regulatory process can be complex and time-consuming, and it may take some time before new regulations are proposed and adopted.
Additionally, opinions on whether the SEC should create new regulations for cryptocurrencies and digital assets, and whether Chairman Gensler should resign because of his failure to create proper crypto regulations in the country, depend on individual perspectives, and there are varying opinions on this matter. Some people may believe that the SEC should be more proactive in creating new regulations to better protect investors and ensure the integrity of the market, while others may believe that existing regulations are sufficient and that the SEC should take a more hands-off approach to regulation.
It is worth mentioning that in the United States, the SEC Chairman is a presidential appointment, and the terms are usually five years, so the decision of resignation or not is not up to the Chairman himself but to the President.
Government agencies that has a role in regulating the cryptocurrency and digital assets
In addition to the SEC, The regulation of cryptocurrencies and digital assets falls within the purview of many government authorities. Some of these agencies include:
- The Commodity Futures Trading Commission (CFTC): The CFTC has jurisdiction over derivatives and futures markets, which includes some cryptocurrencies and digital assets.
- The Financial Crimes Enforcement Network (FinCEN): FinCEN is responsible for enforcing laws related to money laundering and other financial crimes, which applies to transactions involving cryptocurrencies and digital assets.
- The Internal Revenue Service (IRS): The IRS is responsible for enforcing tax laws, which includes taxes on income from transactions involving cryptocurrencies and digital assets.
- The Federal Reserve: The Federal Reserve is the central bank of the United States and has the authority to regulate the money supply and financial stability, which includes any stablecoin or digital assets that would have a direct or indirect impact on the monetary policy.
- The Federal Trade Commission (FTC): The FTC is responsible for protecting consumers from fraud and deceptive practices, which includes any business or individual that engages in activities involving cryptocurrencies and digital assets.
These agencies work together and with the SEC to regulate the digital assets market and create a favorable regulatory framework for the crypto industry.
In order for the United States to be a go-to country for blockchain innovation, government agencies such as the SEC should develop a regulatory framework that is conducive to the growth and development of the cryptocurrency and digital assets markets. This may involve creating new regulations or interpreting existing regulations in a way that addresses the unique characteristics of these assets and better protects investors. It should also balance the development of this technology with a proper oversight to ensure integrity and security in the market.
It would be beneficial for the United States government to support research and development in blockchain technology and to provide educational resources to help individuals and businesses understand the technology and its potential uses. The government could also provide tax incentives and other benefits to companies working on blockchain projects, and also build effective public-private partnerships to spur innovation and investment in this area.
Overall, the United States has the potential to be a leading country in blockchain innovation with the right approach to regulation, investment and education.