H.R. 6154 — Introduced in House

I 116th CONGRESS 2d Session H. R. 6154 IN THE HOUSE OF REPRESENTATIVES March 9, 2020Mr. Gosar introduced the following bill; which was referred to the Committee on Financial Services, and in addition to the Committee on Agriculture, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned A BILL To clarify which Federal agencies regulate digital assets, to require those agencies to notify the public of any Federal licences, certifications, or registrations required to create or trade in such assets, and for other purposes. 1. Short title This Act may be cited as the Crypto-Currency Act of 2020. 2. Definitions In this Act: (1) Crypto-commodity The term crypto-commodity means economic goods or services, including derivatives, that— (A) have full or substantial fungibility; (B) the markets treat with no regard as to who produced the goods or services; and (C) rest on a blockchain or decentralized cryptographic ledger. (2) Crypto-currency The term crypto-currency means representations of United States currency or synthetic derivatives resting on a blockchain or decentralized cryptographic ledger, including— (A) such representations or synthetic derivatives that are reserve-backed digital assets that are fully collateralized in a correspondent banking account, such as stablecoins; and (B) synthetic derivatives that are— (i) determined by decentralized oracles or smart contracts; and (ii) collateralized by crypto-commodities, other crypto-currencies, or crypto-securities. (3) Crypto-security (A) In general The term crypto-security means all debt and equity that rest on a blockchain or decentralized cryptographic ledger. (B) Exception The term crypto-security does not include a synthetic derivative that— (i) is operated as, and is registered with the Department of the Treasury as, a money services business (as defined under section 1010.100 of title 31, Code of Federal Regulations); and (ii) is operated in compliance with all applicable requirements of subchapter II of chapter 53 of title 31, United States Code (commonly referred to as the Bank Secrecy Act) and all other Federal anti-money laundering, anti-terrorism, and screening requirements of the Office of Foreign Assets Control and the Financial Crimes Enforcement Network. (4) Decentralized cryptographic ledger The term decentralized cryptographic ledger means a ledger that— (A) runs as a stand-alone blockchain that is secured through a minting mechanism such as proof-of-work, proof-of-stake, or otherwise; (B) runs as a cryptographic asset or smart-contract on an existing stand-alone blockchain and is secured through the issuing blockchain minting mechanism; (C) is immutable and can not be overwritten without controlling a majority stake of the associated network; (D) requires a cryptographic link between blocks of transactional data; (E) is permissionless, requiring no third party to transact, only a connection to the internet; (F) is an irreversible bearer commodity, with all transactions being final; (G) is not controllable by any one single entity (defined as having less than half of all nodes controlled by one single entity); and (H) is not directly issued by a nation-state or private entity. (5) Decentralized oracle The term decentralized oracle means a service that sends and verifies real world data from external sources outside of a blockchain and submits such information to smart contracts that rest on the blockchain, thus triggering the execution of predefined functions of the smart contract. (6) Digital asset The term digital asset means a crypto-commodity, crypto-currency, or crypto-security. (7) Insured depository institution The term insured depository institution has the meaning given such term under section 3 of the Federal Deposit Insurance Act. (8) Primary Federal digital asset regulator The term primary Federal digital asset regulator means— (A) the Commodity Futures Trading Commission, with respect to crypto-commodities; (B) the Secretary of the Treasury, acting through the Financial Crimes Enforcement Network, and the Comptroller of the Currency with respect to crypto-currencies; and (C) the Securities and Exchange Commission, with respect to crypto-securities. (9) Reserve-backed stablecoin The term reserve-backed stablecoin means a digital asset that— (A) is a representation of currency issued by the United States or a foreign government; (B) rests on a blockchain or decentralized cryptographic ledger; and (C) is collateralized on a one-to-one basis by such currency, and such currency is deposited in an insured depository institution. (10) Smart contract The term smart contract means a computer protocol intended— (A) to digitally facilitate, verify, or enforce the negotiation or performance of a contract; and (B) to allow the performance of credible transactions without third parties. (11) Synthetic stablecoin The term synthetic stablecoin means a digital asset, other than a reserve-backed stablecoin, that— (A) is stabilized against the value of a currency or other asset; and (B) rests on a blockchain or decentralized cryptographic ledger. 3. Establishing areas of primary regulatory oversight for digital assets (a) Crypto-Commodities The Commodity Futures Trading Commission shall be the primary Government agency with the authority to regulate crypto-commodities. (b) Crypto-Currencies The Secretary of the Treasury, acting through the Financial Crimes Enforcement Network, and the Comptroller of the Currency shall be the primary Government agencies with the authority to regulate crypto-currencies (other than synthetic stablecoins). (c) Crypto-Securities The Securities and Exchange Commission shall be the primary Government agency with the authority to regulate crypto-securities and synthetic stablecoins. 4. Registration and public lists of digital asset exchanges (a) Crypto-Commodities The Commodity Futures Trading Commission shall require any exchange trading in crypto-commodities to register with the Commission, and shall maintain a public list of all such exchanges. (b) Crypto-Currencies The Secretary of the Treasury, acting through the Financial Crimes Enforcement Network, shall require any exchange trading in crypto-currencies (other than synthetic stablecoins) to register with the Secretary, and shall maintain a public list of all such exchanges. (c) Crypto-Securities The Securities and Exchange Commission shall maintain a public list of all registered national securities exchanges trading in crypto-securities or synthetic stablecoins. 5. Availability of information to the public on requirements to create or trade in digital assets Each primary Federal digital asset regulator shall, with respect to digital assets over which it is the primary Federal digital asset regulator, make available to the public (and keep current) a list of all Federal licenses, certifications, or registrations required to create or trade in digital assets. 6. Requirements related to crypto-currencies (a) Tracing of transactions Notwithstanding section 3(c), the Secretary of the Treasury, acting through the Financial Crimes Enforcement Network, shall issue rules to require each crypto-currency (including synthetic stablecoins) to allow for the tracing of transactions in the crypto-currency and persons engaging in such transactions in a manner similar to that required of financial institutions with respect to currency transactions under subchapter II of chapter 53 of title 31, United States Code. (b) Reserve-Backed stablecoin audits The Secretary of the Treasury, acting through the Financial Crimes Enforcement Network, shall carry out audits of each reserve-backed stablecoin to ensure that such stablecoin is fully backed by currency issued by the United States or a foreign government. (c) Transition rule for stablecoins If an event (including a dilution event, technical hack, or concerted choice) causes a reserve-backed stablecoin to become a synthetic stablecoin or for a synthetic stable to become a reserve-backed stablecoin, the primary Federal digital asset regulator of the stablecoin shall notify the issuer of the stablecoin and the public of such transition.