According to a report released by Kate Rooney, a markets reporter at CNBC, two congressmen — Warren Davidson and Darren Soto — are preparing a bipartisan bill to exclude crypto from the country’s securities law.
The bill, entitled “Token Taxonomy Act,” is set to be introduced to the House in the months to come in an attempt to facilitate the growth of the cryptocurrency sector of the U.S.
If passed by the House, the bill will eliminate cryptocurrencies and initial coin offering (ICO) tokens from the scope of the U.S. Securities and Exchange Commission (SEC), which may revitalize the country’s ICO market.
Congressman Warren Davidson stated in an official statement that in the early phase of Internet development, the Congress passed legislation to avoid lawmakers from over-regulating the sector.
Emphasizing that a similar effort is needed to sustain the rapid growth rate of the cryptocurrency industry, Davidson said:
In the early days of the internet, Congress passed legislation that provided certainty and resisted the temptation to over-regulate the market. Our intent is to achieve a similar win for America’s economy and for American leadership in this innovative space.
The bill, which is said to have been influenced by a roundtable meeting participated by 50 industry leaders and experts in the likes of Andreessen Horowitz, Fidelity, and Nasdaq along with the U.S. Chamber of Commerce, is the first attempt led by U.S. lawmakers to ease the pressure on cryptocurrency projects.
“These decentralized networks don’t fit neatly within the existing regulatory structure. This is a step forward in finding the right way to regulate them,” said Kristin Smith, the head of the Blockchain Association.
She added that there exists interest among bipartisan members and that could create momentum for the government to approve the bill.
While the probability of the bill’s approval remains slim and still requires significant work until approval, the effort of bipartisan members of the Congress to lead such an initiative to allow the cryptocurrency and the token sector to grow can be recognized as the first positive and a forward-thinking movement in the crypto space led by the U.S. government.
In the short-term, ERC20 tokens, which have lost around 90 to 98 percent of their value against the U.S. dollar on average in the past several months, could potentially see a recovery in value out of the anticipation toward the approval of the bill.
As of December, most major crypto assets such as ICON (ICX), Zcash (ZEC), and Cardano (ADA) remain at around 96 percent to 98 percent down against the USD with no signs of a large trend reversal.
Increasing regulatory clarity on tokens may result in the decline in sell pressure on the majority of crypto assets in the global market, considering that many analysts have described growing regulatory pressure from the SEC on token projects as the biggest factor in the plunge in the value of digital assets.
Meanwhile, until the bill gets passed by the House, the SEC will continue on with its crackdown on tokens that are considered securities under existing regulations. The SEC is an enforcement agency and a commission that abides by regulations established by the government and until changes are implemented by the government, the SEC is expected to go after projects in the cryptocurrency space.
Featured image from Shutterstock. SEC seal from SEC.
Last modified: May 20, 2020 1:20 PM UTC