Congressman Warren Davidson says he plans to reintroduce a bill in the US House of Representatives in a matter of weeks that aims to distinguish digital assets from securities. The bipartisan proposal would specify certain types of cryptocurrencies as an asset class of their own. Dubbed the Token Taxonomy Act, the bill is a response to the exodus of cryptocurrency startups that have fled strict US regulations in search of blockchain-friendly nations and crypto safe havens.
First introduced last December, the bill will be reintroduced to the new 116th Congress, which began on January 3. After the reintroduction, it will go to the Financial Services Committee for review. Davidson told Forbes he expects the bill to pass, but can’t give an exact date on when it will happen.
The cryptocurrency space saw a sharp decline in market capitalization in 2018, and many cited regulatory uncertainty as a major contributing factor to the market’s volatility.
In response, many blockchain firms have packed their bags and relocated to countries such as Switzerland where regulators have declared that not all initial coin offerings (ICOs) are securities. Exemption from securities laws means much more freedom to acquire funding, an enticing boon for any nascent project. And as such, Switzerland has far more blockchain startups relative to its population than the US.
Davidson, a Republican who introduced the bill along with Democrat Darren Soto, says he wants to support blockchain innovation in the US and stabilize the cryptocurrency market. He’s confident the bill will pass.
The Token Taxonomy Act aims to amend the Securities Act of 1933 and the Securities and Exchange Act of 1934,