Members of the U.S. Congress are drafting legislation that would protect certain forms of cryptocurrency from being used for illegal activities while helping cultivate mainstream adoption. Reports indicate that at least one Republican senator and two Republican congressmen are working on the bill.
According to a source who spoke to The Daily Caller, the goals of the legislation are to prevent cryptocurrency from being considered as a form of security or investment, to protect transfers against taxation, and to ensure the federal government does not interfere with cryptocurrencies.
This interference is an issue we’ve seen crop up in recent months. In May, the Combating Money Laundering, Terrorist Financing, and Counterfeiting Act of 2017 sought to introduce a provision that would require anyone in possession of more than $10,000 in cryptocurrency to disclose it when passing a U.S. customs checkpoint — this is problematic given that a virtual currency like bitcoin is always considered to be on someone’s person.
Only cryptocurrencies that are compliant with a set of minimum requirements will be afforded the protections proposed in the bill, and the source claims a new, government-compliant digital currency is in the works: “There is a new entity that is considering issuing a brand new digital currency that is compliant with anti-money laundering laws unlike any other in circulation.”
Many cryptocurrencies offer anonymity as one of their selling points, and most users have legitimate reasons for wanting to have their identities protected. Unfortunately, being able to distance oneself from nefarious transactions is certainly an advantage for various types of criminal activity, and lawmakers obviously have a problem with that.
The hope is that the legislation will help prevent the currencies from being used by drug traffickers, terrorists, and other criminal entities, while clearing the path for others to take advantage of their benefits.
“The bottom line is that Congress needs to remove all the obstacles to a vibrant digital currency that has voluntarily taken the initiative to keep the bad guys from using it,” said The Daily Caller’s source. “The center piece of the plan is to mainstream digital currency so it can be treated just like the American dollar.”
Without seeing the bill in its entirety, it’s difficult to say whether it will foster the next stage of cryptocurrency’s mainstream acceptance or instead undercut too much of its advantage over fiat money. The proposal is expected to be filed in September 2017, so we shouldn’t have to wait too long to find out.
Disclosure: Several members of the Futurism team, including the editors of this piece, are personal investors in a number of cryptocurrency markets. Their personal investment perspectives have no impact on editorial content.