There's several bills coming down the pipeline, and if passed they could take the cryptocurrency markets to places we've only imagined.
We've heard time and time again - institutional investors and Wall Street are coming, so where the hell are they?
It is true we've had countless announcements from big institutional players saying they're entering the cryptocurrency space, one after the other saying they're setting up various new cryptocurrency based operations.
So why have we only heard those announcements, but haven't seen these plans put into action? These firms want in, that part is true - but the money is on hold until the regulations are clear.
That clarity is what these bills would finally bring.
UPDATE: The most important bill of them all, the Token Taxonomy Act has officially been introduced to Congress! That story here.
Warren Davidson (Republican) and Darren Soto (Democrat) are behind the bill at it's inception and it solves the biggest issues US based cryptocurrency investors and project developers have faced over the last year.
The bill states that tokens shall no longer be defined as 'securities' and therefore shouldn't have to follow the same guidelines as investments such as stocks, it also makes clear what needs to be reported for tax purposes, and what doesn't.
It officially frees the emerging technologies of blockchain and cryptocurrencies from it's current state - bound to outdated laws passed in the 1940's. To put that in perspective, the first color TV was sold in 1954 - but cryptocurrencies in the United States are being regulated with laws written nearly a decade before that.
Another bill that's even further along in the process is House Resolution 528 which addresses laws regarding the transferring of money - and frees cryptocurrency from them. This bill has already been officially introduced.
But none of this matters if the bills can't pass. I believe they will - let's go through each step of the process.
BIPARTISAN INTRODUCTIONS:
The bill is written by 1 Republican and 1 Democrat.
Do you ever feel like elected officials from each party just looks to see if an idea is presented by the opposing party, and if it was - then they're against it?
However, a bill authored and introduced by members of both parties will require politicians to actually look into what it's about.
I believe even if they don't understand the technical aspects, the core concept is quite simple: using regulations written in 1945 and applying it to technology invented in 2008 is absurd. They don't need to understand much more than this to know this bill is vital to keeping America competitive in the global marketplace.
THEY'VE GATHERED WIDE SUPPORT FOR CRYPTOCURRENCY ONCE BEFORE:
The first move in the right direction began with these same congressmen issuing an official letter to the SEC requesting their clarification regarding how they will regulate ICOs, back in September of this year.
It used bold language, clearly stating their concern that the SEC was using "a heavy-handed regulatory approach that could stall innovation" when it came to cryptocurrency.
They submitted this letter with 14 signatures in total, from a variety of both Democrats and Republicans. I think it's reasonable to assume we can expect these same officials to also be supporters of this bill when it comes time to vote.
THE BITCOIN BOOGIEMAN IS DEAD:
The days of people hearing "bitcoin" and thinking it's just the official currency of everything evil are behind us.
With companies such as Bakkt, owned by the New York Stock Exchange, Starbucks, and Microsoft entering the cryptocurrency space, and 99% of news stories being on the topic of it's price and fundamentals, not drugs purchased online - the public perception has changed drastically.
Before casting a vote, government officials may even want to check with other agencies to see if this new perception is true.
If they do, they'll find reports from people like Special Agent Lilita Infante of the US Drug Enforcement Administration (DEA). The report states that in the 5 years of monitoring illegal activity using cryptocurrencies - they've seen a dramatic drop.
Those 5 years began with them suspecting up to 90% of cryptocurrency transactions were for illegal purchases. Today that's 10% and still dropping.
NO LONGER JUST WATCHING FROM A DISTANCE:
I clearly remember the feeling I would get when I heard there would be any kind of hearing that included the topic of cryptocurrency. Wondering if anyone has ever actually sat down with our elected leaders and given them at least a basic overview of what cryptocurrency even is.
Finally, now roaming the halls of congress are people representing the cyptocurrency and blockchain industry.
The US Blockchain Association is backed by funding from the top exchanges and blockchain startups, and it's only existed since September of this year.
If a member of congress expresses their opposition to the bill, it's their job to set up a meeting, to help guide them in the right direction and correct any misconceptions.
Those who vote in support of bills that fuel the industry's growth can likely expect some help when it comes time to funding their next campaign.
Like it or not, this is how the game is played. Many people, myself included see this as long overdue. We may not be in the position we are now if these efforts had begun earlier.
IT ALL ENDS ON THE DESK OF A PRESIDENT, WITH A CRYPROCURRENCY ADVOCATE AT HIS SIDE:
If what i've said so far turns out to be correct - the final step is the bill arriving to the White House where it needs it's final signature of the President before becoming law.
Once again, there's reason to believe the bill will pass this final step.
That's because 2019 kicked off with cryptocurrency supporter Mick Mulvaney as President Trump's new Chief Of Staff.
Mulvaney is a former congressman - actually, he's the first member of congress to accept Bitcoin campaign donations.
He was also the author of two bills - 1108 and 7002, which urged officials to take a reasonable regulatory approach to the cryptocurrency markets, and make smart contracts legally binding equal to a signature on paper.
IN CLOSING:
There's one final point I always try to mention when writing on the subject of regulations, because there's a common misconception that things like this bill would suddenly turn the cryptocurrency markets into a lawless wild west for investors, and somehow make things easier for the bad apples and scam ICOs. That is not the case. It always has, and always will be illegal to lie in order to get other people's money - that's called fraud.
With that said, I just cannot look at all of the factors above and come to any other conclusion - the odds are in our favor!
This story originally ran Jan 2019, it was updated April 15th 2019 to include recent developments and current data.
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Author: Ross Davis
San Francisco News Desk
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