In 2018, a congressman from Ohio, Warren Davidson, sponsored a bill called Token Taxonomy Act seeking to exclude cryptocurrencies from Securities Law. Although the bill was not passed into law, the lawmaker has approached Congress to reconsider the bill and pass it into law. He has, however, not made any alterations to the earlier version of the bill. Rep. Davidson asserts that the best time to create the regulatory system is now or never. This is so because many stakeholders in the crypto industry have complained about the lack of laws backing up the industry.
Will the Third Attempt be Successful?
This is the third time that Davidson is approaching the House to consider the bill. His first time introducing it was in 2018, close to the end of the legislative session. He later reintroduced it a year later with just a few alterations. But the bill has not been debated in the House. In a Tweet, Rep. Davidson expressed hope that the House would pass the bill and pay more attention to the blockchain industry, which has a huge potential to change the world’s economic and financial landscape. He added that he would convince the House to amend the earlier securities Law to remove some cryptocurrencies from the securities list.
If the bill is passed into law, it will be easy to transfer from one crypto account to the other without being taxed. Also, it will modify the tax system for cryptocurrencies in an individual’s retirement account. Another member of the House, Darren Soto from Florida, expressed total support for the bill. In his submission, he noted that if passed into law, the bill would strengthen the meaning and jurisdiction of the crypto space and promote the use of digital assets in the US.
The Bill May Not Give a Clear-Cut Legislative Direction– Observers
Meanwhile, some observers have expressed concern about the bill. They admitted that although Blockchain Association is backing the bill, it may not give a clear-cut direction to the industry.This is because the federal government might define and understand a digital currency differently from the way some states might define it. For instance, Wyoming that had already had its existing law on the crypto industry, might go contrary to the federal stance.
The bill to exclude some cryptocurrencies from securities laws take another shape at the federal level and It is now up to Congress to give a clear direction on its stance on digital tokens. Furthermore, a securities lawyer, Gabriel Shapiro, says that states may not find it easy to regulate the crypto market. And this is an at of trampling on the rights of the states. Now, the bill is being discussed by the House committee on financial services.
It is crystal clear that every state has its way of treating persons and businesses holding or trading in cryptocurrencies. Currently, most states are yet to make laws regarding the holding and investing in digital tokens. Some states have stated their regulation and stance on cryptocurrencies, such as whether to consider digital tokens as securities or not. Other states have also made some minor legislation or amended existing laws to guide cryptocurrencies.