The ‘Building America's Trust Act’ May Affect Blockchain-Based Currency Issuers

On September 5, 2017, the "Building America's Trust Act" was placed on the calendar for the 115th Congress.

As summarized, the act was introduced "to strengthen border security, increase resources for enforcement of immigration laws, and for other purposes." The "other purposes" would seem to apply to cryptocurrencies, as Sec. 409 of the bill explicitly amends definitions found in Section 5312(a)(2)(K) of title 31 of the United States Code to encompass "issuers, redeemers and cashiers of prepaid access devices and digital currencies to the definition of financial institutions."

The act also identifies "prepaid access devices" as:

 "[A]n electronic device or vehicle, such as a card, plate, code, number, electronic serial number, mobile identification number, personal identification number, or other instrument that provides a portal to funds or the value of funds that have been paid in advance and can be retrievable and transferable at some point in the future.’’

Within 18 months of implementation, the "Building America's Trust Act" will require a report to Congress from the Comptroller General of the United States, that reflects the impact of the amendments to law enforcement, the prepaid access industry, consumers, and "the implementation and enforcement by the Department of the Treasury of the final rule relating to ‘Bank Secrecy Act Regulations – Definitions and Other Regulations Relating to Prepaid Access.’"

If it passes, the act may usher in a new series of regulations to which entities, newly-defined as financial institutions, could be required to adhere.