According to the draft laws, exchanges would have to undergo complicated registration procedures, which would slow down or shut down many market players. Cryptocurrency creators would also suffer: they would seem to have to prove the value of their projects.
Currently, many countries are developing uniform cryptocurrency legislation. That includes Russia, E.U. member states, and the USA. However, agencies have not been able to decide on the definition of “cryptocurrency” and its application in court practice for years. Moreover, despite the lack of consensus among lawmakers on the nature of cryptocurrencies, local courts have ruled on ‘cryptocurrencies, and soon they will have something to fall back on — America will finally have unified legislation related to crypto-assets.
Right now, U.S. crypto legislation consists of scattered laws, mostly related to tax regulation. For example, if you mine cryptocurrency while living in America, you must pay tax. If you, as an American citizen, make more than $10,000 in digital assets, i.e. cryptocurrencies, you have to calculate and pay the tax yourself. Citizens calculate the amount of tax in the U.S., not the government.
What does the new bill say?
The new bill is called the Responsible Financial Innovation Act. It states that cryptocurrency deposit and withdrawal company providers must disclose full information about their customers. That includes cryptocurrency exchanges and wallets. It is regardless of where they live or their citizenship. Experts point out that the draft looks more like a tightening of citizen surveillance rules than an innovative way of doing business in the crypto industry. However, the prerequisites for introducing such a law are also clear: increasing cases of fraud, criminal activities, and money laundering through cryptocurrency exchanges leave no alternatives to states.
According to the bill, creators of new cryptocurrencies, companies distributing stablecoins, exchanges, and other market participants (not individuals) would be subject to complicated registration. Developers of stable coins, for example, would have to prove that they have reserves to cover the issue, while creators of blockchain coins would have to prove that their product is necessary for the market.
Why might most cryptocurrencies disappear? Because many coins that can prove their necessity and provide businesses with the transparency regulators want will inevitably become digital commodity assets, just like copies of games or software on your laptops. Coins that fail to pass inspection sooner or later will cease to exist. Experts estimate that they will be as high as 99% of all coins currently on the market, as only large players known to those outside the cryptocurrency industry will qualify for the new terms.