In 2013, an event was hosted by the US Treasury Department’s Financial Crimes and Enforcement Division (FinCEN). During this event, advocates of bitcoin met with a few federal agencies to discuss the possibilities of bringing Cryptocurrency under government regulation. The discussion revolved around involving law enforcement and financial agencies such as the Federal Bureau of Investigation, IRS, Drug Enforcement Administration, Secret Service, and Department of Homeland Security.
The specialty of bitcoin is that it does not have a central governing body or central bank. Customers can send it using peer-to-peer networks that don’t have any administration. The money is saved in a digital wallet, and each transaction made is stored in a blockchain. Since blockchains are public records, it is easier to trace the transactions. This also makes it convenient to stop individuals from making copies, prevent them from selling bitcoins they don’t have and undo any transaction once sold.
While some countries have brought a complete ban on Cryptocurrency, countries like the USA have had a friendly approach towards this form of technology. Mining bitcoins online is entirely legal in the USA, although the government is trying to introduce laws to regulate it.
So far, Cryptocurrency has existed without any law implication by the United States Federal Government. Though there is no central law, the USA has left individual states to apply their regulations to Cryptocurrency. States like Arizona, New York. Nevada, Maine, and others have introduced bills to define codes for acceptable practices by blockchain companies and users.
As the bitcoin industry grows, the US government has raised its opinions on how people should disclose their capital gains or profits to the IRS and put forth a taxation system. In 2013, the Treasury Department had also suggested that companies dealing in Cryptocurrency should register themselves and report large transactions.
Even as the world faces a pandemic situation, a US lawmaker from Arizona has proposed a law to bring all forms of Cryptocurrency under the federal regulations. Rep. Paul Gosar introduced the Cryptocurrency Act of 2020 in March 2020.
He said, “We may be quarantined, but our work continues. In fact, I just introduced the Crypto-Currency Act of 2020, a bill that my team has worked hard on over the past several months.”
The lawmaker further went on to state, “By providing much-needed regulatory clarity about Cryptocurrency, we will make it easier for businesses, institutions, and everyday Americans to participate in this growing industry. No more murkiness, uncertainty, or confusion.”
The bill is aimed towards clarifying which federal agencies can regulate digital assets. It also suggests that those agencies must inform users of any certifications, licenses, or registrations required to trade in cryptocurrencies or related assets. The intention behind introducing such a law is to keep America at the forefront of the crypto industry.
Adding to this proposed law, Gosar further said, “Cryptocurrency offers a way for forgotten and oppressed people to participate in the global economy … A beacon of hope to much of the world, Cryptocurrency is becoming one of the fastest-growing industries. The United States must remain part of that growth.”
There is nothing concrete in place yet, in terms of regulations in the cryptocurrency market. Several agencies are trying to prevent digital money from being used in illegal trades. Many countries believe that bringing Cryptocurrency under legislation might boost its acceptance in the financial markets, but then again, it can harm the country’s fiat currency. Even with the prevailing confusion, countries across the globe are not taking Cryptocurrency lightly.