Billionaire Democratic Presidential aspirant Mike Bloomberg has included crypto regulations and other virtual currency-related matters as part of his financial reform policies. Bloomberg’s policy statements center around simplifying the current regulatory landscape for cryptocurrencies in the U.S. while proposing rules for crypto taxation and initial coin offerings (ICOs) among others.
Several U.S. crypto and blockchain stakeholders have bemoaned the fragmented nature of the country’s cryptocurrency laws stating that the lack of clear-cut rules was dampening the growth of the market.
Bloomberg Steps into Yang’s Crypto Void
According to the “Financial Reform Policy” document put out by the Bloomberg campaign on Tuesday (February 18, 2020), the Democratic aspirant is keen to regularize crypto regulations in the U.S.
An excerpt from the policy document reads:
“Cryptocurrencies have become an asset class worth hundreds of billions of dollars, yet regulatory oversight remains fragmented and undeveloped. For all the promise of the blockchain, Bitcoin and initial coin offerings, there’s also plenty of hype, fraud and criminal activity.”
As part of the policy statement, Bloomberg promises to work with Congress and U.S. regulators to create clear-cut crypto regulations in the country. The first item on Bloomberg’s crypto agenda is clarifying the roles of the various agencies overseeing the country’s crypto space.
Other points of interest for the Bloomberg L.P. CEO include creating a legal framework for ICOs, crypto fraud prevention as well as cryptocurrency taxation laws and rules for virtual currency custodians. Concerning ICO laws, Bloomberg wants to create a framework for determining which offerings are securities.
So far, the U.S. Securities and Exchange Commission (SEC) has stated that most ICOs constitute securities offering. Thus, many ICO projects have come faced indictment from the Commission with projects forced to pay millions of dollars in fines.
Bloomberg’s foray into crypto regulations should come as a relief to U.S. cryptocurrency stakeholders especially after fellow Democratic aspirant Andrew Yang dropped out of the race. Before pulling out, Yang had been a firm ally of the U.S. crypto sector advocating for clearer regulations and increased blockchain technology adoption.
Solving America’s Hodgepodge Crypto Regulations Landscape
Bloomberg’s crypto policies touch on the current talking points in the U.S. cryptocurrency scene. Several market participants say the patchwork of State and Federal crypto regulations is causing major disruptions to the development of America’s digital economy.
Currently, some lawmakers in the U.S. have introduced legislative proposals to Congress concerning cryptos. These bills call for clearer ambits for Federal regulators as well as ‘de minimis’ tax exemptions small cryptocurrency transactions. Another bill, “The Token Taxonomy Act,” aims to completely exempt crypto tokens from securities regulations.
In the absence of clear-cut crypto regulations, some U.S. exchanges have been forced to geofence certain crypto tokens. Others have either created separate platforms for U.S. customers or move their business overseas.
Is the U.S Far Behind in the Emerging Digital Economy?
The move to clarify U.S. crypto regulations also comes at a time when several stakeholders say the country is lagging behind the likes of China in the emerging digital economy. Facebook’s Libra announcement in 2019 also reportedly stirred the proverbial pot with Congress and the Federal Reserve scrambling to begin considering the possibility, of a ‘digital dollar.’
Meanwhile, China is already making steady progress with its plans to create a central bank digital currency (CBDC) with recent reports revealing that the People’s Bank of China (PBOC) has filed more than 80 patents on the matter.
Other central banks are also researching the possibility of CBDCs with the likes of Canada, Sweden, and Switzerland forming a think tank to trade ideas on central bank-backed digital currencies.