Bitcoin in a file photo

Restrict Act could be used to ban Bitcoin and other cryptocurrencies in the US

Coin Center, a non-profit advocacy group for digital currencies, has warned that the proposed Restricting Excessive Speculation and Tokenization Act RESTRICT could be used to ban Bitcoin and other cryptocurrencies in the United States.

Concerns raised by Coin Center over the bill’s language

The Restrict Act was introduced in the House of Representatives in February 2023 with the aim of preventing market manipulation and excessive speculation in digital assets. It would grant the Commodity Futures Trading Commission (CFTC) greater regulatory powers over the cryptocurrency market, including the ability to limit the trading and force the delisting of certain tokens.

However, Coin Center argues that the wording of the bill is overly broad and could be interpreted to ban all cryptocurrencies, not just those that are subject to market manipulation. The organization pointed to a provision that defines “digital asset” as any digital representation of value, regardless of whether it is a security or a commodity.

Potential impact on Bitcoin and other cryptocurrencies

In a blog post, Coin Center Executive Director Jerry Brito wrote that the RESTRICT Act “would give the CFTC broad authority to regulate any digital asset, whether or not it is a security, and regardless of whether it is traded on a centralized exchange, a decentralized exchange, or not at all.”

Brito went on to argue that the bill’s language could be used to classify Bitcoin and other cryptocurrencies as “digital assets” subject to CFTC oversight, effectively banning them in the United States. He also criticized the bill’s proposed restrictions on trading, arguing that they would harm market liquidity and innovation.

The Act has already drawn criticism from other cryptocurrency advocates for the possibility RESTRICT Act Could Be Used to ban Bitcoin, who argue that it would stifle innovation and drive digital asset businesses offshore. Some have also raised concerns about the CFTC’s ability to effectively regulate the fast-moving and complex cryptocurrency market.

Criticisms and support for the RESTRICT Act

Despite these criticisms, the Restrict Act has gained support from some lawmakers, who argue that greater regulation is necessary to protect investors and prevent market manipulation. The bill is currently being considered by the House Committee on Agriculture, which has jurisdiction over the CFTC.

Coin Center has called on lawmakers to revise the Act to ensure that Restrict Act Could Be Used to Ban Bitcoin and does not inadvertently restrict legitimate digital assets. The organization has also urged regulators to work with the cryptocurrency industry to develop effective regulatory frameworks that balance innovation with consumer protection.

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