U.S. Regulators Have Different Views of Cryptos
by Marvin Dumont
Adopters view cryptocurrencies as digital borderless money, but governments look at cryptos through complicated lenses.
Each agency advances its own agenda, and defends its own bureaucratic kingdom, as well as public funding. The result is a discombobulated regulatory framework that helps no one. Rather than encourage innovation, the regulatory-industrial-complex impedes it.
The Federal Reserve has been implying that cryptos are bad or inconsequential, or both. Chairman Jerome Powell recently said:
It’s not something that we are actively considering … For us, it raises substantial, significant issues that we want to see carefully resolved.
It’s a speculative store of value like gold.
The Fed is a private corporation that has printed more than $4.5 trillion in new fiat dollars since 2008. It’s interesting that Powell would use the word “speculative” when many coins and tokens have a limited supply.
The Securities and Exchange Commission (S.E.C.) views cryptos as a security, and wants to regulate as such.
The Commodity Futures Trading Commission (CFTC) views them as a derivative and/or commodity. On Oct. 10, CFTC Chairman Heath Tarbert said:
We’ve been very clear on bitcoin: Bitcoin is a commodity under the Commodity Exchange Act …. It’s my conclusion as chairman of the CFTC that Ether is a commodity and therefore would fall under our jurisdiction.
The Financial Crimes Enforcement Network (FinCen) views them as currencies.
This month, the Internal Revenue Service (I.R.S.) issued new guidance that supplements Notice 2014–21, issued in 2014. The agency “applied general principles of tax law to determine that virtual currency is property for federal tax purposes.”
Go figure.
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