Guess Who Wants to Protect Your Cryptos?
“…Aaaand it’s gone.”
That line from a 2009 South Park episode came at the depths of the financial crisis.
In the episode, characters watched their brand-new investments plunge to $0 within seconds.
It was a cynical take on a brutal bear market, where the S&P 500 Index crashed over 50%.
Today, the crypto markets are in a similar panic.
LUNA crashed 99.99% after its stablecoin depegged from the U.S. dollar.
Crypto lender Celsius said on Monday that it’s pausing all withdrawals and transfers.
And Coinbase, another major exchange, warned its customers that they could lose their cryptos if the company goes bankrupt.
For crypto investors, this is distressing news. After all, no one wants to worry about their investments suddenly vanishing one day.
But there’s help coming soon…
And it’s a huge step for bringing cryptos to the mainstream.
These Regulations Are a Game-Changer for Cryptos
Earlier this month, U.S. Senators Cynthia Lummis, R-W.Y., and Kirsten Gillibrand, D-N.Y., unveiled their landmark crypto bill.
The bipartisan Responsible Financial Innovation Act creates regulatory guidelines for the crypto space.
At the same time, it aims to foster innovation.
That way, U.S. crypto firms can continue to grow their businesses and develop better blockchain tech.
Here are some of the bill’s highlights:
- For tax purposes, the bill treats cryptos like dollars for purchases of under $200.
That’s a huge deal for making cryptos convenient for everyday transactions.
Because right now, if you use bitcoin or the Next Gen Coin to buy a cup of coffee, the IRS makes you pay a capital gains tax.
This bill would get rid of that tax for normal purchases.
- It appoints the Commodity Futures Trading Commission (CFTC) as the crypto watchdog.
The CFTC would oversee crypto exchanges and monitor crypto trading.
In addition, it would help protect crypto exchanges from cyberattacks.
This is a big step for making people feel safe about their crypto investments.
- The bill aims to protect your cryptos in case an exchange goes bankrupt.
That’s critical because right now, an exchange might be able to claim your cryptos as its own property.
If the firm declares bankruptcy, then your cryptos are gone forever.
But this way, your cryptos are your property, not the exchange’s.
- Another key rule is that stablecoins must actually be, well, stable.
That means the coins need to be 100% backed by dollars.
This would prevent the kind of “bank run” that destroyed LUNA and its stablecoin.
The bill also provides a framework for banks and credit unions to issue stablecoins.
These regulations are a game-changer for the crypto markets.
They let Americans know that the government has their back when it comes to cryptos.
And that sets up a huge wave of crypto adoption…
Cryptos Have a Ton of Room to Grow
Now, keep in mind that historic legislation like this doesn’t happen overnight.
The Senate probably won’t vote on the bill until next year.
And some key aspects, like the $200 limit for purchases, could change by then.
But right now, people are desperate for reassurance that their cryptos won’t disappear.
This bill could solve that problem.
That’s one reason Ian King is confident that cryptos like the Next Gen Coin are here to stay.
And remember: The entire crypto market is worth less than $1 trillion.
Meanwhile, the global financial industry is worth $100 trillion.
So cryptos have a ton of room to grow from here.
Government regulations making cryptos safer will be a key part of that growth.
Assistant Managing Editor, Banyan Hill Publishing
From open till noon Eastern time.
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