Gemini Proposes Creation of Self-Regulatory Virtual Currency Association for the US Market

During the last couple of months, regulatory authorities throughout the world have been actively working to propose workable legislation for the digital currency industry. In the United States, there is a lack of standardization at state level, due to the difference between federal and state law.

Because of this aspect, the Gemini digital currency exchange, has decided to get involved by submitting a proposal for the creation of a self-regulatory organization, to handle regulatory aspects in the U.S. digital currency industry.

The process was started following the recent CFTC order, in which the regulator mentioned that all virtual currencies in the US, will be regarded as commodities. Gemini initially replied by stating that virtual commodities such as bitcoin, are rather exempt commodities, as they cannot be put in the same category as gold, natural gas, oil, or silver, as per the CFTC definition.

Gemini then went ahead and mentioned that the purchase or sell of commodities in cash markets have always been exempt from the CFTC jurisdiction, due to the fact that such transactions are normally not speculative, or subjective to forms of manipulation. Yet, this is not the case for digital currencies, which are highly-speculative and unfortunately manipulative depending on the state of the market.

In a recent press statement, Gemini mentioned that: “Cash markets for virtual commodities, however, are unique in as much as: (a) the commercial use-cases for virtual commodities are still developing, (b) there is strong speculative interest, (c) these marketplaces involve a large number of individual participants, and (d) technology makes individual transaction costs exceptionally low (on a relative basis) as compared to other physical commodity spot markets.”

Gemini’s proposal to set up the Virtual Currency Association, talks about how it would be an industry-sponsored, self-regulatory organization pertaining to the US virtual currency market, and dealing with regulation on cryptocurrencies, exchanges and users. Its main purpose would be to make sure that regulations are compliant to the global standard, therefore there uniting the crypto market under a similar set of regulations, to avoid future complications.