Congress to Vote on US Crypto Bill – What It Means for Investors and Others
- The House returns from recess on September 12th to vote on the cryptocurrency legislation.
- Cryptocurrency could be considered a security or a commodity, which is big for investors.
- It remains to be seen what will happen to crypto, but it could pay off to make your own decision soon.
There’s a real chance that cryptocurrency is about to make some strides in the US. It’s already gained tons of attention from the public, and a serious amount of money has been invested in it across the board.
That said, cryptocurrency hasn’t been put in the official legislature. For crypto to progress further, we must answer some important questions. The next big step is determining whether crypto should be considered securities or commodities.
If they are securities, they will be regulated by the Securities and Exchange Commission (SEC). They would be in the same family as stocks, bonds, equities, mutual funds, etc.
The Commodity Futures Trading Commission (CFTC) will regulate if they get the commodity tag. Crypto would be in the same party as gold, silver, oil, or agricultural products.
In simpler terms, the bill is trying to decide if crypto is more for investing or trading goods and services.
So, what should investors be cheering for? If it’s considered a security, transactions will need licenses from the SEC. One of the core elements of a cryptocurrency is that it is decentralized, and an organization, such as the SEC or CFTC, wouldn’t be able to identify the core group that values the coin.
Crypto-backers spend a lot of their efforts trying to prevent their coins from being considered securities. Similar to Bitcoin gambling, their main focus is to use cryptocurrency to exchange goods and services in a fast manner.
Getting licenses from the SEC would slow the process down, which is not what crypto users want. It would also make it more difficult to get more people to use crypto when they need a license to make transactions.
Some politicians, such as Elizabeth Warren, have stated that cryptocurrency is most likely to be used for “illicit activity.” That is where the Bank Secrecy Act (BSA) comes into play. The BSA requires financial institutions to fill out five reports to ensure they aren’t laundering money.
Since the current laws don’t really pertain to cryptocurrency, there’s also a good chance that new laws must be written to help classify the whole financial process.
Several proposals have been submitted and have been voted on by Congress, such as the following:
- Clarity for Payment Stablecoins Act of 2023
- Keep Your Coins Act of 2023
- Financial Technology and Protection Act of 2023
Congress has approved some of these bills, but they still must be signed by the President to be an official bill. The voting process for these proposals did not go smoothly either, with Democrats walking out of the hearing for the Clarity for Payment Stablecoins Act of 2023.
We are still in the early stages of just about everything, so it’s hard to determine what you should do as an investor.
One thing is clear: you need to know if you are in on crypto as an investment or if you plan on using it to make transactions. A lot of people got into the coin exchange market over COVID-19 in hopes of making a lot of money off of it.
Now that we are approaching a new world of crypto, in which we decide if it’s a security or a commodity, things will change again. If you didn’t know by now, the crypto market is always on the move, so this is on theme.
Cryptocurrency could be considered a security, which makes it hard to say if the value of coins will go up or down. More people will consider it an investment, but it’s no longer the “get rich quick” scheme that many thought it was.
We have seen some major crypto firms fall recently, such as the collapse of FTX. If that is a sign of what is to come, crypto investors could be in trouble. However, being considered an official security could provide clarity for others, and it could be safer than before.
If crypto were to fall under the category of a commodity, it would likely remain available for fast transactions and as an investment, albeit a riskier one. It could reach the heights that it did during COVID, but it could also bottom out.
So, should I buy, sell, or wait and see if I own cryptocurrency? You might not be too excited to know the answer is what you think will happen. Will the US crypto bill crash the market entirely, or will it solidify it as a legitimate form of exchange?
There’s a good chance you don’t know what to do, and you are certainly not alone. If you’d like to see how things pan out, then you can absolutely do that as well.
In the end, the next few weeks are going to be huge for the crypto community. Congress is currently on recess but will return to vote on the legislation on September 12th.
