Various media reported this week that US Treasury Secretary Stephen Mnuchin is considering whether to pass legislation to regulate self-service wallets.
This has prompted some cryptocurrency analysts and experts to ponder whether it will affect Bitcoin, in addition to the current bullish momentum that is pushing the price of the cryptocurrency higher.
The threat of new rules targeting the crypto sector is a potential event that has negatively affected cryptocurrency prices, but this time there are several reasons why the proposed rule may not cause bitcoin’s price crash.
Regulations are evaluated in the crypto market
Industry leaders initially raised serious concerns when Coinbase President Brian Armstrong shared what he had heard about the planned base.
The fear increased when circuit chief Jeremy Aller told Ryan Silkes that the potential regulation could damage the entire cryptocurrency sector. Comments from these two businesses have led the industry to be skeptical of the planned rule proposal.
However, recent reports indicate that the rule may require financial institutions to report multiple transactions equivalent to $ 10,000 per day. Compared to the first rumors about Al Qaeda, she is probably less stringent than it appears. In fact, some experts say the proposed rule is similar to the FATF’s current travel rule.
Given that the rule could have been less stringent than originally planned, and the fact that the market has had ample time to trade it, it’s possible that the market has already appreciated it at this point.
Which way can Mnuchin go?
There are two main ways in which Mnuchin can introduce rules for self-storage wallets. First, it was able to follow the usual regulations, which required a hearing and a 30-day period.
If Mnuchin takes the traditional approach, the proposal should be announced this week before the end of the current presidency.
Alternatively, Mnuchin could try to find a way “for good reason” to overturn the ruling. This should allow Mnuchin to speed up the process. Attorney Jason Cefalieri said:
In addition, it is an exception if the agency formulates “good case” that the notification / general action requirement is “impractical, unnecessary or contrary to the public interest.” For example, a potential use case for this exception is ending the pandemic. Consequently, the Finance Ministry will have to clearly state why it wants this requirement to be removed “for good reason”. For example, it might show that much of the criminal act will be stopped with the early implementation of a new rule. It seems unlikely, but maybe? ”
At this point, Mnuchin will likely take the traditional approach. To use the “good cause” method, he must find sufficient evidence to prove that the cryptocurrency is involved in major criminal activity.
Thus, the probability of implementing the proposed rule in the next few days is still the highest, which is optimistic for Bitcoin. Matt O’Dell, Bitcoin and Privacy spokesman, said:
“The block indicates that the US government will simply require exchanges to report Bitcoin withdrawals in excess of $ 10,000. They already assumed they did. The concerns that Armstrong and Davidson voiced looked much worse. Public anxiety might have helped. If true, it is. Very optimistic “.