Current Blockchain & Cryptocurrency Regulations in the USA

We have entered the 14th year of cryptocurrencies and blockchain technology. So far, we have witnessed the process of acceptance and adaptation of the crypto world to daily life on the basis of both individuals, companies, and governments. While some of the groups accepted it, some of them decided to ban. For example, China has banned everything related to cryptocurrencies. On the other hand, Zug, a city in Switzerland, involves a crypto world named The Crypto Valley, where crypto and blockchain investors can improve blockchain technology.

Although countries such as China and Switzerland are large and influential in the world economy, the attitude of the USA, which has an impact on the global financial sector as well as the owner of the dollar, the headquarters of the FED, and the founder of Wall Street, is just as important in crypto and blockchain. Therefore, we decided to examine the USA’s current blockchain & cryptocurrency laws and regulations within this article.

KEY TAKEAWAYS:

• While blockchain is completely banned in some countries, it is generally more accepted on the west side.
• Giant organizations like JPMorgan and Amazon have already started investing in their blockchain technologies.
• There is no generally accepted interstate law against blockchain in the United States.
• Blockchain legislation in the United States takes place at the agency level.

The First Reactions of Corporate Companies to Crypto

So how did it all start? Why is the US government arranging regulations and legal laws while some governments want to ban blockchain and coins?

It all started in 2008 when Satoshi Nakamoto introduced the first Bitcoin and Blockchain technology to the world. Afterward, the crypto world, which developed slowly and surely for a while, became more and more popular with the success of different coins such as Litecoin and Ethereum, besides Bitcoin. In fact, while a giant bank like JPMorgan announced its own digital currency, the world’s largest trading company Amazon announced that it was building its own Blockchain network.

Currently, close to 3,000 different types of coin currency, hundreds of various DeFi projects, hundreds of decentralized exchanges, and similar blockchain-based innovations are a part of daily life. Only the market capitalization of Bitcoin maintains itself as an average of 1 trillion dollars.

However, despite all its size, the question marks that institutional banks, companies, and governments have for blockchain and cryptocurrencies have not been answered, and thus they share a common concern. That is, the biggest concern about coins and blockchain is whether they can be used for money laundering, supporting terrorist activities, or some similar criminal actions. Such concerns brought with them the idea that these innovations should be regulated within the framework of the law and should be regulated by an institution. For example, the European Union (EU) has prepared official legislation to prevent money laundering and concluded its 5th Anti-Money Laundering Directive (5AMLD) on January 10, 2020.

General Attitude of US Government Toward Crypto

If we were to evaluate the general attitude of the US government towards blockchain technology and Bitcoin, our answer would be “positive.” In other words, the US prefers to open its doors to the crypto world rather than closing it completely like China, but it does not neglect some regulations. Both federal and state governments keep an eye on the blockchain and Bitcoin; however, most regulations have been proposed at the agency level.

You may ask which agencies they are? Here is the list:

• The Securities and Exchange Commission (SEC)
• The Commodity Futures Trading Commission (CFTC)
• The Federal Trade Commission and Department of Treasury
• The Internal Revenue Service (IRS)
• The Office of the Comptroller of the Currency (OCC)
• The Financial Crimes Enforcement Network (FinCEN)

However, we cannot say that all these agencies and states in America have a uniform definition and a way of application. While each agency defines the crypto in its own way, each state has its own methods of applying cryptocurrencies to real life.

For example, FinCEN does not accept cryptocurrencies as a means of payment and only allows them to be used as a means of sending/receiving money on exchanges. On the other hand, the IRS is working on taxing cryptocurrencies by attributing them to “property” in everyday life.

How do States in the USA Approach the Blockchain World?

When it comes to the states, things are a bit different. However, the attitude of the states, in general, is to leverage investments in the new technology, blockchain, and cryptocurrencies so that they can become a part of daily life as an improved additional financial structure.

Everything started in 2015 when New York announced that it would regulate the currency companies by the rules stated by the state agencies. After that, more than 30 states have completed legislation procedures to encourage people and businesses to invest in blockchain and Bitcoin. Some of them even gathered and established a team to examine the technology further so that they can improve and benefit from the new technology more.

Besides, we know that Wyoming, a state in the USA, has allowed the financial use of cryptocurrencies by completing the necessary legislation to establish new crypto banks that will serve as custodial and fiduciary. Therefore, people living in Wyoming can run crypto-based businesses safely and legally.

Other state examples are Ohio, which is the first US state accepting taxes as cryptocurrency, and Oklahoma, which considers cryptocurrencies assets that have monetary values within its governmental agencies.

In contrast, as we mentioned above, everything is not all white for the crypto world. Except for the examples we have given so far, Iowa has announced that it is banning cryptocurrencies as a means of payment. Besides, Maryland and Hawaii have warned people about cryptocurrency technology.

Conclusion: Development of Blockchain Tech Behind the Regulations

While the crypto charts continue to fluctuate, there is no consensus for blockchain and cryptocurrencies to be adapted to daily life and accepted by institutional agencies. While some governments are positive about them, others are content with the restriction. On the other hand, countries like China ban crypto in every sense. In America, the situation is similar. While some states support crypto and embrace applications integrated into daily life, some maintain their position as negative. As for financial agencies, they are progressing at the federal level and have not been able to reach a consensus.