After careful consideration, the United States Congress has outlined its intention to regulate cryptocurrencies and other digital assets.
Digital assets’ legal uncertainty has long been a source of worry for governments throughout the world. The recent Terra meltdown, which resulted in the loss of $15 billion in the crypto market, has only fueled the desire for regulation.
The 118th Congress submitted 50 proposals and resolutions on regulation, blockchain, and CBDCs amid the crypto market’s panic. After months of conjecture, a decision has been made. Stablecoins draught legislation and a strategy on digital asset regulation are not included in this landmark decision.
What is included in the bills?
In recent years, new regulatory problems have arisen as a result of blockchain technology. These include malware and the role bitcoins played as a currency in Russia’s invasion of Ukrainian territory in 2014. In the midst of this crisis, Ukraine is said to have received millions of dollars in crypto contributions, while Russia was attempting to avoid economic sanctions by utilising cryptocurrency. NFT trading and DeFi services have opened up new ways for government bodies to enforce regulations.
Several measures were enacted within the crypto taxes category, as per Forbes. Two senators, one from each party, presented the Virtual Currency Tax Fairness Act of 2022.
If you make $200 or less in virtual currency transactions, you’ll be excluded from the Act’s regulations. The Safe Harbor for Taxpayers with Forked Assets Act of 2021 was introduced by Congressman Tom Emmer. This legislation would exclude from gross income any sum received as forked virtual currency.
The second category, CBDCs, likewise included a large number of legislation. The Accountability for Cryptocurrency in El Salvador Act was presented in order to analyse the effect of Bitcoin in El Salvadore. According to the bill, El Salvador’s financial system and the United States’ financial system would be examined for the effects of Bitcoin’s legalisation there. The E-Cash Act, on the other hand, aims to create a digital dollar.
It’s also important to clarify how digital assets and digital asset securities will be regulated in the third category. It is among them that blockchain services and software developers are protected by the Blockchain Regulatory Certainty Act. For the SEC, referring to digital assets and digital asset securities has proven to be a difficult task, which is why the Token Taxonomy Act was proposed.