Warren Davidson, the US Representative reinstated his signature bill this week, titled Token Taxonomy Act. This marked the third attempt in three years to get the proposed regulations completed. The proposed bill is an attempt to provide a coherent piece of legislation for the regulation of cryptocurrencies. It also includes various crypto-friendly measures with respect to the tax implications of using, selling, and buying cryptocurrencies.
The Token Taxonomy Act was introduced in 2018 for the first time, with the pursuit to excuse some cryptocurrencies from securities laws. The law includes other digital assets as well. The bill is expected to give clarity to consumers, businesses, and regulators functioning in the developing US blockchain ecosystem.
The bill’s specific purpose it to modify the Securities Exchange Act of 1940 and the Securities Act of 1933. If the bill is successful in fulfilling its aim then it would afford regulators with much clarity. Regulators like the Securities and Exchange Commission will have greater clarity on how to effectively enforce securities laws with respect to cryptocurrencies. Presently the piecemeal laws and regulations are a cause of confusion and aggression towards the blockchain industry.
The bill is co-sponsored by US representatives, Josh Gottheimer, Scott Perry, Ted Budd, and Darren Soto. After being objected to in 2019, the bill is now making its third round in the House of Representatives.
Warren Davidson was worried that the US’s opportunity to lead the world in blockchain technology was slipping away. He stated that with the fear of being left behind, the country had to quickly move forward.
According to Davidson other countries had discovered ways to regulate the technology and made the industry appealing to businessmen. He added that the US needed a proper regulatory scheme to ensure local blockchain innovations. This he said was for the benefit of the Americans only.
In the absence of an effective federal regulatory scheme, many businesses and businesspersons are shifting their businesses overseas. They are moving to territories where favorable and clearer laws have established flourishing blockchain markets. Naturally, these investors and businesses find it more lucrative to set up in a country that has proper checks and balances.
The interest of the market in blockchain technology and cryptocurrencies continues to flourish as specific crypto-tokens relished prosperity throughout the pandemic. Additionally, the Biden Administration is also contemplating whether or not to remove regulations enforced by the Trump Administration on private digital wallets.
US is already the most powerful economy of the world and it would be a pity if it cannot retain that title in the crypto economy. The US will have to come up with clear, unambiguous and friendlier regulations for cryptocurrency in order to entice the crypto/blockchain industry.
Given the increased rate of cybercrime against cryptocurrency, it is now essential to regulate it.