s senators introduce crypto bill outlining sweeping plan for future rules. Now this ones not as bad from the mining perspective well go over. Why but lets get the run down. Kristen gillibrand and cynthia loomis release the long awaited strategy that favors the cftc as a watchdog and wipes away tax worries from buying things with cryptocurrencies a wide reaching bipartisan crypto bill finally emerged tuesday from the us senator cynthia, loomis and kristen, or kirsten. Excuse me gillibrand, who are seeking to extend a comprehensive set of regulations across digital assets in the u.s and have given industry lobbyists something meaty to debate. Their bill would liberate small scale, purchase of goods and services from the meijer of tax implications by making it all tax free on transactions less than 200. Now that is, awesome, thats a start right, but we have large large purchase requirements now, due to inflation, 200 isnt. Really that much when you consider the price of groceries now is going to be for a standard family in the u.s is going to be way more than 200 a week and then so do you have to go purchase groceries more frequently? How does all that function? You know playing around with these rules if youre using cryptocurrency but its a good start, potentially clearing a path for cryptocurrency that acts more like a currency and as expected, the legislation would grant new powers and a commanding presence to the commodity futures trading commission. The far reaching legislation attempts to tackle the most significant questions hanging over digital assets, it would set new federal law for stable coins, taxes on small scale payments and the jurisdiction of regulators.

Answering the uncertainties that keep the fledging financial sector from maturing. However, the effort from loomis and gillibrand is seen in washington as a starting point for a dialogue that wont lead anywhere significant before next year. I believe its supposed to be december of this year is when this was supposed to be or will be expected to be enacted. It joined several previous bills that mostly sought to bite off narrow pieces of the cryptocurrency landscape, such as the recent push for stable coin rules by senator pat toomey. It even borrows from borrows from some of that work. Still, the effort would likely have to split into several pieces in 2023, as it winds through congressional committees in the next session, with loomis on the second senate banking committee, that oversees the securities and exchange commission and gillibrand holding a spot on the agricultural committee that watches The commodities and the cftc the lawmakers are well placed to help shepherd key portions of the legislation. Their so called responsible financial innovation act creates regulatory clarity for agencies charged with supervising digital asset markets, provides a strong tailored regulatory framework for stable coins and integrates digital assets into our existing tax and baking laws. End quote in the words of lumis. These are some of the main features of what gillibrand described as a landmark build that will provide clarity to both industry and regulators, while also maintaining the flexibility to account for the ongoing evolution of digital assets markets.

It would define the terrain between crypto securities and commodities, allowing token issuers to know beforehand what theyre launching based on the purpose of the asset and the rights of powers it conveys to the consumer. The market envisioned in this bill is dominated by commodities, including most of the big names in crypto such as bitcoin ethereum and dozens of other tokens with significant market share. That would fall into a definition as ancillary and assets overseen by the cftc. The lawmakers would give commodity features trading commission authority over the spot markets in crypto commodities, as sought by agency chief rosten benham. That would carve out a key new power for the federal watchdog that doesnt doesnt now have much reach into cash markets. It also gives needed legal clarity in how to handle customer holdings after the recent furor over customers tokens getting roped in with an exchanges assets. In the event, the company goes bankrupt. A worry that erupted after coinbase suggested that it has as possibility in a recent securities and exchange commission filing. This is one that we were interested in. So i dont know what the clarity is. There necessarily doesnt say what it is. The biden administration has signaled. It wants better custody arrangements in any crypto bills moving through congress. The loomis gillibrand effort also adopts language from a bill last year from representative patrick henry and others that sought to clarify the meaning of a crypto broker, especially hoping to protect wallet providers, software developers and others from being snagged by certain tax reporting requirements.

This is helpful. Obviously, for miners as well, the bill doesnt automatically set up the self regulatory organization that many in the industry have lobbied for, but it calls for a study from the sec and cftc and a proposal for starting one crypto operations watched by the cftc would, under this Legislation have to start paying fees to fund the agency akin to the model that now supports the sec. The senators also suggest an industry sandbox in which regulators let crypto firms test new products on a limited scale in duration. In the light of the recent dramatic collapse of terra usd ust, one closely examined aspect of the bill will be its move towards a hundred percent reserve asset type and detailed disclosure requirement for all payment. Stablecoin issuers there would be a new framework for banks and credit unions to issue stable coins, but issuers wouldnt have to become depository institutions. The lawmakers insist that existing stablecoin issuers and new entrants into the market have an adequate opportunity to compete with existing banks and credit unions. The bill also requires certain disclosures to the sec from companies raising funds through digital asset sales. The approach would ensure that market participants and our securities regulatory community receive detailed and accurate disclosures about those digital assets that are widely traded, but in a manner that encourages innovation, said lewis, cohen, co, founder of the lx law. Obviously, theres a lot to go over with this bill im gon na attack it from only the mining perspective.

I do think that there are some positives from the mining perspective that come into play here, specifically as it pertains to the treatment of the the actual process of mining. We can see it here. I do have the bill pill pulled up um once again. This is a proposal i have not gone over. The entire thing ive been trying to scan as much as i can here, is implementing the effective irs guidance and on number three here we have treatment of digital asset mining and staking as a production activity in which income is not realized until disposition of the assets Produced or received in connection with such production activity, in accordance with the section of 451 of the irs code of 1986, this does mean uh, positive things from the mining perspective, primarily because now no longer are we really having to worry about tracking the day of which You get the payout and the price of the payout, but presumably would only have to worry about the tax implications once liquidated. I am not a tax attorney im, not a cpa. This is not financial advice, and this is my very brief, and albeit very basic knowledge of how this reads to me in particular. Maybe you guys can talk to me about it at the end of the show and questions and answers and educate me a little bit more in case. I am misunderstanding that, but overall that seems like a positive from the mining perspective.

The rest of the bill obviously has some things that are concerning, but i dont necessarily even disagree with forcing basically a full fully back stable coin im, not a fan of stable coins in general uh, but definitely not of algorithmic stable coins. I know that there are some that, like people are really really kind of behind more excited about that are algorithmic, and i get that and im not going to attack anybody in particular. But i just think that once again, when we talk about these subjects, im usually of the mindset of if you want to participate within that traditional finance field – and you have you activate that through a centralized exchange or whatever it is, then you just you adhere to Those rules right, but then within the rules of cryptocurrency kind of leave us alone, which obviously will never get to be left alone completely. I hope you enjoyed this clip from the crypto mining morning show every monday through friday, 7 45 a.m, pacific and 10 45 a.m. Eastern time you can check out more clips here or, if youre interested in checking out the entire live show.