Amidst the hustle and bustle of Sacramento's legislative sessions, two critical crypto regulatory bills, AB 39 and SB 401, are on the verge of being enacted. These proposed laws could significantly influence the bitcoin and broader cryptocurrency industry, potentially impacting regulatory frameworks beyond California's borders. As a leader in regulatory oversight, California's actions set the stage for future cryptocurrency regulations in other states.
BitAML's Role in the Regulatory Process
Our team at BitAML, based in Sacramento, has been actively involved in these legislative developments. We have taken an active part in discussions with policymakers, educating them about bitcoin and its existing regulatory and compliance requirements. Our experiences on this journey have been enlightening and humbling, allowing us to contribute significantly to the discourse surrounding consumer protection, sensible regulation, and innovation in the cryptocurrency industry.
An Overview of AB 39 and SB 401
AB 39 and SB 401 are two bills currently awaiting Governor Gavin Newsom's approval. These bills, once signed into law, will significantly impact bitcoin financial service providers operating in California.
AB 39 (Grayson): Regulatory Oversight for Digital Financial Asset Businesses
AB 39 seeks to establish a state money transmitter licensing framework for cryptocurrency exchangers. This bill places these exchangers under the oversight of the California Department of Financial Protection & Innovation (DFPI). The requirements set forth are consistent with money transmitter licensing requirements in other states.
Interestingly, the bill allows the DFPI to issue a "conditional license" to an applicant who already holds a "BitLicense" with the New York Department of Financial Services (NYDFS). AB 39 also empowers the DFPI to exempt certain businesses from licensure requirements and enables businesses to petition the agency in writing.
The Significance of AB 39 for Stablecoins
AB 39 mandates that issuers of stablecoins obtain a license and establishes an approval process for stablecoins to be overseen by the DFPI. This bill acknowledges the elevated risks associated with stablecoins and ensures these risks are adequately managed.
Balancing Consumer Protection and Innovation
While no legislation is perfect, AB 39 strikes a reasonable balance between protecting consumers and fostering innovation. However, it is essential to note that the bill's effectiveness will largely depend on how the DFPI implements its provisions.
SB 401: The Future of Bitcoin ATM Operators
SB 401 is another crucial piece of legislation that affects bitcoin ATM operators. It requires these operators to obtain a license from the DFPI and mandates that they provide a list of all their locations to the agency.
The Future of Bitcoin Legislation in California
The decision now lies with Governor Newsom, who has until October 14th to either sign or veto these bills. The bitcoin community is eagerly awaiting these developments, understanding that they are witnessing the formation of key regulatory foundations.
Joe Ciccolo, the Founder & President of BitAML, has been instrumental in advocating for regulations that balance innovation with consumer safeguards for the long-term betterment of the bitcoin ecosystem. As we await the final decision, it's clear that these regulatory changes will significantly impact not only California but potentially the entire nation.
Frequently Asked Questions
Should You Invest Gold in Retirement?
The answer will depend on how many dollars you have saved so far and whether you had gold as an investment option at the time. If you are unsure of which option to invest in, consider both.
In addition to being a safe investment, gold also offers potential returns. It is a good choice for retirees.
Most investments have fixed returns, but gold's volatility is what makes it unique. Therefore, its value is subject to change over time.
This does not mean you shouldn’t invest in gold. It is important to consider the fluctuations when planning your portfolio.
Another benefit to gold? It's a tangible asset. Gold is more convenient than bonds or stocks because it can be stored easily. It is also easily portable.
You can always access your gold if it is stored in a secure place. Plus, there are no storage fees associated with holding physical gold.
Investing in gold can help protect against inflation. It's a great way to hedge against rising prices, as gold prices tend to increase along with other commodities.
Additionally, it will be a benefit to have some of your savings invested into something that won't lose value. Gold rises in the face of a falling stock market.
You can also sell gold anytime you like by investing in it. Like stocks, you can sell your position anytime you need cash. You don’t even need to wait until retirement to liquidate your position.
If you do decide to invest in gold, make sure to diversify your holdings. Don't put all of your eggs in one basket.
Don't buy too many at once. Begin by buying a few grams. Next, add more as required.
Don't expect to be rich overnight. Instead, the goal is to accumulate enough wealth that you don't have to rely on Social Security.
And while gold might not be the best investment for everyone, it could be a great supplement to any retirement plan.
Is it a good idea to open a Precious Metal IRA
It is essential to be aware of the fact that precious metals do not have insurance coverage before opening an IRA. It is impossible to get back money if you lose your investment. This includes investments that have been damaged by fire, flooding, theft, and so on.
Investing in physical gold and silver coins is the best way to protect yourself from this type of loss. These items have been around thousands of years and are irreplaceable. You would probably get more if you sold them today than you paid when they were first created.
You should choose a reputable firm that offers competitive rates. A third-party custodian is a good option. They will protect your assets while giving you easy access whenever you need them.
When you open an account, keep in mind that you won't receive any returns until your retirement. So, don't forget about the future!
How much tax is gold subject to in an IRA
The fair market value at the time of sale is what determines how much tax you pay on gold sales. When you purchase gold, you don't have to pay any taxes. It is not income. If you decide to sell it later, there will be a taxable gain if its price rises.
For loans, gold can be used to collateral. Lenders will seek the highest return on your assets when you borrow against them. For gold, this means selling it. The lender might not do this. They might keep it. They might decide that they want to resell it. You lose potential profits in either case.
You should not lend against your gold if it is intended to be used as collateral. It is better to leave it alone.
Statistics
- (Basically, if your GDP grows by 2%, you need miners to dig 2% more gold out of the ground every year to keep prices steady.) (smartasset.com)
- You can only purchase gold bars at least 99.5% purity. (forbes.com)
- If you accidentally make an improper transaction, the IRS will disallow it and count it as a withdrawal, so you would owe income tax on the item's value and, if you are younger than 59 ½, an additional 10% early withdrawal penalty. (forbes.com)
- Instead, the economy improved, stocks rebounded, and gold plunged, losing 28 percent of its value in 2013. (aarp.org)
- Gold is considered a collectible, and profits from a sale are taxed at a maximum rate of 28 percent. (aarp.org)
External Links
wsj.com
- Saddam Hussein's InvasionHelped Uncage a Bear In 90 – WSJ
- Are you interested in keeping gold in your IRA at-home? It's Not Exactly Legal – WSJ
law.cornell.edu
- 7 U.S. Code SS7 – Designation of boards for trade as contract markets
- 26 U.S. Code SS 408 – Individual retirement accounts
finance.yahoo.com
forbes.com
How To
Guidelines for Gold Roth IRA
You should start investing early to ensure you have enough money for retirement. Start saving as soon as possible, usually at age 50. You can continue to save throughout your career. It is important to invest enough money each and every year to ensure you get adequate growth.
Also, you want to take advantage tax-free options such as a traditional 401k, SEP IRA or SIMPLE IRA. These savings vehicles permit you to make contributions, but not pay any tax until your earnings are withdrawn. This makes them a great choice for people who don’t have access employer matching funds.
It's important to save regularly and over time. If you don't contribute the maximum amount, you will miss any tax benefits.
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By: Joe Ciccolo
Title: The Impact of California's Pivotal Crypto Bills AB 39 and SB 401 on The Future of Bitcoin Industry
Sourced From: bitcoinmagazine.com/legal/ab-39-sb-401-an-analysis-of-pending-california-legislation-for-bitcoin-exchanges
Published Date: Thu, 12 Oct 2023 13:30:00 GMT
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