Cryptoleto: American Laws have turned the digital currency Industry upside Down
The scandals in Washington had little effect on the promotion of bills on the cryptocurrency industry. Three bills successfully passed legislative hurdles in Congress last week, and one has already been signed by President Donald Trump. This is a huge progress for cryptocurrencies, since before that, laws fully introducing them into the legal field had not been adopted in large states. Unsurprisingly, bitcoin has grown dramatically, just like other cryptocurrencies, while awaiting lawmaking and the actual adoption of the document. What these bills are and why they are key to the crypto market can be found in the Izvestia article.
One of Trump's main promises before last year's presidential election was the complete legalization of cryptocurrencies and the creation of full—fledged rules of the game for them, preferably not too intrusive. It is difficult to say how this affected his support by the population, but donors associated with the cryptocurrency business appreciated this — for the most part they supported the Republican campaign. Trump's behavior also contrasted strongly with the previous Democratic administration's cold attitude towards the crypt. And I must say that the counter—steps of the newly elected American government were not slow in coming - only issues related to immigration and duties were resolved even faster. The fact that the adoption of these laws is important for Trump is shown by the fact that, according to him, he spoke on the phone with lawmakers several times in the dead of night before the approval of the document in Congress.
The laws passed last week have seriously raised the quotes of most virtual currencies. Bitcoin, ether and XRP jumped to record levels. Bitcoin has generally become the most profitable major asset in the world this year, rising in price by almost 30% and outpacing gold and the Nasdaq Composite technology index.
The effect of these laws will not appear immediately, but they will accelerate the transition of cryptocurrencies from a niche segment of the economy to the global mainstream.
A "brilliant" idea
One of the bills has not only been passed by both chambers, but also signed by the President. The document received the characteristic name GENIUS — "genius" (it is common for the US Congress to refer to documents with expressive abbreviations). This act opens the way for companies to issue stablecoins— digital currencies issued by individuals. The name of this category comes from their "stable" value, since they are equated to various fiat currencies (mostly the US dollar) or, less often, other cryptocurrencies. There are also algorithmic stablecoins, the issue of which is regulated depending on the exchange rate, but they are even rarer. The advantage of stablecoins pegged to fiat currencies is that they are much less volatile compared to conventional cryptocurrencies, so they are easier to use for daily payments.
Some companies have already issued stablecoins, but they operated in a "gray" legal field. Specific requirements for issuers are now being established, such as compliance with anti-money laundering laws and monitoring suspicious transactions. Although some consumer advocates believe that these requirements are insufficient.
Most companies considering issuing stablecoins after adopting GENIUS state that they will first use them for backend operations, for example, to reduce the fees that sellers pay to credit companies, or to simplify currency conversion for international payments. Large financial institutions are already showing considerable interest. The Wall Street Journal reported that several American banks, along with the Zelle payment system, are discussing the release of a joint stablecoin. Although Zelle is free for users, her work is paid for by other bank fees.
The potential of stablecoins in reducing the costs of backend operations is practically not disputed. Branded stablecoins can also give customers special discounts when paying with company tokens. The main disadvantage of such currencies is confusion for buyers, as there will be many different monetary units in circulation at the same time. And, more importantly, stablecoins are guaranteed only theoretically: if the issuer fails to maintain the exchange rate, then people and organizations can lose a lot of money overnight.
There is little "clarity" yet
The second bill, called CLARITY, represents a more general framework for regulating cryptocurrencies. Here, the promotion is more modest. So far, it has passed the House of Representatives and is under consideration in the Senate. It is worth noting that he received the support of almost all Republicans and a good third of Democrats, that is, more than initially expected.
Anyway, many more amendments will be made to the act before it reaches the president's desk, so it's too early to talk about its parameters. The main stumbling block: according to the presidential draft, the turnover of cryptocurrencies will be regulated not by the Securities and Exchange Commission (SEC), but by the Commodity Futures Trading Commission (CFTC). We can say that cryptocurrencies are to some extent equivalent to gold, but there is also a much more prosaic reason for this transfer of responsibility: the CFTC is a much less stringent organization in terms of regulation.
The Senate has already proposed to reconsider this idea. Most likely, the skirmish between the branches of government will last for more than one week, which is not very favorable for the prospects of the law and the expectations of the crypto industry, which hoped for minimal regulation of the sector.
No government-owned cryptocurrency
The third bill concerns only the United States and prohibits the Fed or other government and quasi-government entities from issuing their own cryptocurrency. It has been known for a long time that central banks around the world are planning to issue their own digital currencies (CBDCs). In the USA, this idea has met with the most acute reaction. Some congressmen threatened to block the passage of all three bills if CBDCs were not banned. At the same time, Democrats supported this initiative.
At the moment, dozens of countries are launching their CBDC projects, including Russia. These steps have their own risks, as it is not fully clear what will happen in such a situation with the banking system, whose role in lending may be seriously undermined. That is, the interests of both Wall Street and some voters who fear that CBDCs will become a tool of control converged here.
In general, it can be stated that cryptocurrencies are getting closer to the financial mainstream. Although all their advantages and disadvantages remain in place, obeying government regulations will make them more understandable to most people. Other countries are closely following the United States, as the experiment with the legalization of "crypts" in one of the two largest economies in the world will be extremely indicative of the direction of the industry's development. In Europe, Asia, and Russia, actions in relation to cryptocurrencies will largely depend on the preliminary results obtained in America.
Переведено сервисом «Яндекс Переводчик»
