U.S. crypto regulations: Will New Jersey pave the way?

New Jersey has taken the first steps toward introducing a crypto regulation bill.
However, analysts have noted that the bill is not without its issues.

When one looks into the crypto regulatory landscape of the United States, certain discrepancies prop up. The notable issue is that there is no clear framework for cryptocurrencies in the country.

Now, the state of New Jersey has stepped up with a crypto bill to fill the void left by the federal government.

One could say U.S. crypto companies are working in a gray area when it comes to regulation. The basic question that still remains in the U.S. is how to classify cryptocurrencies. Are they securities or commodities or a different class altogether?

The Securities and Exchanges Commission (SEC) has been of the stance that all digital assets are securities, except for Bitcoin [BTC]. Whereas, the Commodity Futures Trading Commission (CFTC) deems them as commodities.

Whether the SEC or CFTC should be the guardian of crypto markets has been a subject of debate for years. The dispute arose mainly because there has been no clear guidance to date.

Though the U.S. Congress advanced a bill in July to develop a regulatory framework for cryptocurrencies, there hasn’t been much progress. The bill sought to define when a cryptocurrency can be classified as a security or commodity.

The state of New Jersey plans to tackle these inconsistencies with its new bill.

New Jersey takes the lead

New Jersey has introduced a bill to help decide when a cryptocurrency could be deemed a security and when a commodity. According to the bill, all virtual currencies issued and sold directly to institutional investors would be considered securities.

The bill has defined institutional investors as,

“A company or organization that invests money on behalf of other people.”

Democratic Assembly member Herb Conaway introduced the bill on the 29th of November. It is to be noted that this bill would only apply to transactions governed by New Jersey law.

Moreover, the act doesn’t have any implication

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Author: Ann Maria Shibu

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