Republican Senator, elected from Wyoming, Cynthia Lummis and Kirsten Gillibrand, Democratic Senator from New York State, introduced proposed cryptocurrency legislation on Tuesday, May 7. If adopted by the Senate, the “Responsible Financial Innovation Act” would completely overturn American regulation of the sector. The Commodity Futures Trading Commission (CFTC), an independent federal agency with little experience in cryptocurrencies, would supplant the role of the SEC. The players in the virtual currency community are delighted with this news.
Cryptocurrency miners protected from income tax
As the SEC steps up its actions to monitor the cryptocurrency industry, where many scams proliferate, its regulatory role could be negated by this new bill. The two authors praise the merits of their proposal, according to them ” the first serious effort to apply comprehensive regulation to the cryptocurrency industry by giving oversight power to the CFTC.
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This federal agency controls the activities of many economic sectors. For example, it examines contracts for the cereals industry or assesses new products before they are put on the market. By dealing with cryptocurrencies, it would add a new string to its bow, while it is a relatively small agency, specifies the washington post.
The CFTC already regulates contracts related to Bitcoin or Ether, the two most popular cryptocurrencies. The proposed law would give it more power, with oversight of cryptocurrency buying platforms like Coinbase and a wider variety of virtual currencies.
This project is very popular with players in the sector because cryptocurrency brokers would no longer have to provide certain information to the tax authorities. Investors would no longer have to pay capital gains tax when using cryptocurrencies to purchase goods and services, up to a value of two hundred dollars per transaction. Finally, cryptocurrency miners would be exempt from income tax until their assets are turned into cash.
Lobbying pays off
Cryptocurrency investors believe the SEC is too aggressive in its regulatory actions. The president of this federal agency, Gary Gensler, says that “ digital assets represent $1.2 trillion in securities “. This gives the SEC the responsibility to control these assets and their issuers according to him.
Senator Cynthia Lummis defends her bill, explaining that ” the United States is the world’s economic leader, and to ensure that the next generation of Americans enjoy better opportunities, it is critical to integrate digital assets into existing law to harness the efficiency and transparency of these virtual currencies, while preventing risks “.
The many lobbying operations carried out by players in the sector in recent months have borne fruit. Senator Cynthia Lummis’ campaign committee in Wyoming, for example, had received contributions from cryptocurrency investors. If the law passes the Senate, cryptocurrencies could experience a resurgence. Faced with the economic weight represented by virtual currencies and the risk of fraud, legislators want to give them an appropriate legal framework. The players in the sector are doing everything possible to make this framework as flexible as possible.