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US Congress Urges FinCEN To Take It Slow After Its Latest Crypto Proposal

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The cryptocurrency world has been subject to an array of regulations as its popularity has been soaring up. Back in December the US financial regulator, FinCEN has urged backs as well as other financial institutions to keep an eye on transactions related to private cryptocurrency wallets. While this rule required the crypto-verse to spruce up their KYC game, a few members of the US Congress wrote a letter to the US Treasury Secretary seeking more time on the rule.

US Congress Writes A Letter To The US Treasury Secretary

A letter signed by nine members of the US Congress including Tulsi Gabbard, Tom Emmer, Darren Soto, David Schweikert, Warren Davidson, Ted Budd, Bill Foster, as well as Susan K. DelBene was sent out to FinCEN director Kenneth Blanco and Steve Mnuchin, the US Treasury Secretary. The letter entailed details pertaining to the FinCEN’s latest crypto rule which required cryptocurrency exchanges to carry out KYC investigations on the private wallets of its users.

All those who signed the letter affirmed that they were as interested in addressing and protecting the national security as the FinCEN was, however, the real problem lies in the time limit given to the crypto platforms. A total of 15 days during the holidays were given to these exchanges. The aforementioned letter urged Secretary Mnuchin as well as Blanco to reconsider the comment period to 60 days. In the letter, the members of Congress pointed out that 15 days wasn’t a “reasonable opportunity” for the American public.

The letter further read,

“This is a highly complex rulemaking as the 24 detailed questions that FinCEN asks in the notice attest. It would be impossible for the public to give meaningful comment with so little time, and a rushed process threatens the legitimacy of this rule. It also makes the new regulations very susceptible to legal challenges.”

At the end of the letter, the members of the US Congress suggested that the rush in the latest rulemaking could affect the community that has been a “cooperative partner with FinCEN.”

OCC Chief Too Inclined Towards Crypto, Suggest Members Of Congress

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The crypto-verse was beyond happy after Brian Brooks took over as the Chief of the Office Comptroller of the Currency aka OCC of the United States. Brooks’ association with the prominent cryptocurrency exchange Coinbase in the past spruced up the fate of crypto in the country. Even though Brooks has been trying to walk in that path, an array of hurdles have been hindering his journey.

OCC Chief Receives Letter From Six Members Of US Congress

Several members of Congress including Congresswoman Rashida Tlaib, Congressmen Stephen Lynch, Jesús G. “Chuy” García, Deb Haaland, Barbara Lee as well as Ayanna Pressley wrote a letter to Brian Brooks, the Acting Comptroller of the Currency [OCC]. A press release shared by Congresswoman Rashida Tlaib’s office detailed that they had concerns pertaining to the bureau’s “unilateral actions” with regard to crypto-assets as well as stablecoins. The press release was titled, “Tlaib, Lynch Lead Letter Blasting OCC for Unilateral Actions on Fintechwww Charter, Cryptocurrency.”

The OCC has been giving the crypto-verse better regulatory clarity. Back in July, certain federally chartered banks acquired a thumbs up for crypto custody and in September the banks received consent for stablecoin reserve custody. The Congress feared that OCC’s inclination towards the crypto world could steer away attention from the vulnerabilities the existing system is exposed to following COVID-19.

The letter further read,

“Our concern regarding the OCC’s excessive focus on crypto assets and crypto-related financial services is shared by the American Bankers Association and other trade groups who have expressed similar reservations that such services move too far away from the core business of banking.”

Brian Brooks was previously serving as the Chief Legal Officer at the San Francisco based crypto exchange, Coinbase. He began working as the head of the OCC on 29 May 2020. As he stepped into his office, Brooks made sure to reveal his stance on crypto. Just days after taking on his role, the head of OCC urged the public to deliver feedbacks as well as comments regarding the regulation of crypto.

Furthermore, the letter urged Brooks’ to reconsider the entanglements of a unilateral approach. The members of Congress proposed that Brooks’ initiate a collaboration between the OCC, other regulators as well as the Congress on matters similar to this.

Digital Dollar and Digital Wallets Considered by House Democrats to Help Unbanked Population During the COVID-19 Pandemic

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It’s just March, and the world has witnessed multiple crises in the form of the threat of World War 3 and the spread of Coronavirus. The effect of the latter was so significant that stock markets crumbled in a recession like fashion, forcing investors to run helter-skelter.

To ensure better access to resources for the unbanked population, the House of Democrats has begun to consider the use of the digital dollar and digital wallets. This was done to ensure that the underprivileged do not get run over during the current crisis. Discussions about a digital dollar had surged after financial officials claimed they would be ready to print ‘infinite’ fiat currencies. 

The members of Congress began discussions about digital wallets because of the rapid spread of the Coronavirus across the globe. If the decision is carried forward, cryptocurrency wallets will be a part of the COVID-19 economic stimulus plan.

The House Financial Services Committee Chairwoman Maxine Waters claimed that large Federal Reserve banks and other financial institutions will need to provide digital wallets to create a more seamless financial ecosystem. Although wallets were considered, the concept of a digital dollar was still far from inception.

Digital assets were considered as an answer to the current financial situation because of increased settlement times and security. The Fed has usually stayed away from cryptocurrencies because of the industry’s connection with the fraud.

Federal Reserve Chairman Jerome Powell has always been against the idea of a CBDC [Central Bank Digital Currency] and it does not look like it will be included in the stimulus plan either. The idea behind a ‘digital dollar’ was to link the advantages of a cryptocurrency with an overwatch from the Fed.

Both Republicans and Democrats negotiated a $1200 payout for single adults earning less than $75,000 per year. The payment amounts will also be phased down in value until hitting a hard cap of $99,000. Some sources have said that draft legislation mentioned a $2000 payment per month to each adult in that particular threshold. This would be done as long as the COVID-19 pandemic lasts.

Two trade associations that would be a part of the digital wallet mandate would be the American Bankers Association and the Bank Policy Institute. What surprised crypto enthusiasts the most about this development was the range discussed for digital assets.

The Electronic Transactions Association will also include additional payments methods such as digital wallet settlements. Cryptocurrency enthusiasts added that at this point, all industries must come together to survive the onslaught. Jodie Kelley, the CEO of the Electronic Transaction Association said:

“In addition to banks, ETA supports using other modern payments methods like prepaid cards, digital wallets, money service businesses, and P2P services to securely, quickly deliver stimulus money to American consumers.”

It was not hard to see why lawmakers chose to consider all sorts of payment methods during these trying times. The world has not seen such a collective fear since WWII and financial markets have responded poorly. Only time will tell if the virus spreads and wreaks more havoc or if things go back to normal as soon as possible. Daniel Gorfine, a former chief innovation officer at the CFTC admitted that it would be difficult to create a digital dollar during the currency crisis.

US Congress Discusses Crypto Taxes and Benefits for Small Businesses

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The United States government has been active in monitoring developments in the cryptocurrency industry and ensuring they adhere to written law. Government agencies have also taken steps to listen to, and devise strategies for, the digital asset space

During a recent US congressional meeting, one of the testifying witnesses claimed that the US cryptocurrency taxation expectations were mired in complexities.

The meeting was titled “Building Blocks of Change: The Benefits of Blockchain Technology for Small Businesses and included parties that defended as well as attacked blockchain technology. The focus was on small businesses because regulators believed that blockchain technology could really help them build from the ground up.

Officials like Marvin Ammori, who serves as a member of the General Council of Protocol Labs, have added that cryptocurrency taxes are the worst nightmare, in response to a question as to whether crypto is ready for mass adoption. Compared to discussions on launches, such as Facebook’s Libra, the Small Business Committee took a new look at distributed ledger technology.

Congress aimed to have a healthy conversation about how blockchain can help emerging businesses grow, rather than just applying it for cryptocurrencies. Mr. Marvin Ammori also pointed out the difficulties that may arise when cryptocurrencies like Bitcoin are used. He said:

“If you wanted to spend Bitcoin on a coffee this morning, you’d have to keep track of what you paid for the Bitcoin and how much it was worth the moment you spent it, and pay the capital gain or loss on every single transaction. If we could have a de minimis tax exemption, which has been proposed — the Virtual Currency Tax Fairness Act — I think all of you should support that.”

The confusion caused by the decisions of the Securities and Exchange Commission [SEC] and the CFTC was also discussed in US Congress. The need for clarity among regulators has been a major marker in the industry, as a number of inane laws have brought down critical cryptocurrency projects. Some cryptocurrency enthusiasts even say that the SEC directives do not allow the creation of a Bitcoin ETF.

This was the first time in a long time that the US Congress actually made some valuable points rather than just making a mockery of the industry. The cryptocurrency space has been the subject of ridicule several times earlier with people who have no idea about the technology partaking in it. Meetings such as the Building Blocks of Change act as stepping stones in improving the talk around crypto.

The most recent meeting was a follow-up to another meeting held on 3 March. During the earlier discussion, four digital asset space experts spoke about their recent leaps and opportunities. The panel also included Jesse Sprio, Chainalysis ‘ Global Head of Policy and Regulatory Affairs.